Order Code RL31672
CRS Report for Congress
Received through the CRS Web
Terrorism in Southeast Asia
Updated February 7, 2005
Bruce Vaughn, Coordinator,
Emma Chanlett-Avery, Richard Cronin,
Mark Manyin, Larry Niksch
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

---

Terrorism in Southeast Asia
Summary
Since September 2001, the United States has been concerned with radical
Islamist groups in Southeast Asia, particularly those in the Philippines, Indonesia,
Malaysia, Thailand, and Singapore that are known to have ties to the Al Qaeda
terrorist network. Southeast Asia is a base for past, current, and possibly future Al
Qaeda operations. For nearly fifteen years, Al Qaeda has penetrated the region by
establishing local cells, training Southeast Asians in its camps in Afghanistan, and
by financing and cooperating with indigenous radical Islamist groups. Indonesia and
the southern Philippines have been particularly vulnerable to penetration by
anti-American Islamic terrorist groups.
Members of one indigenous network, Jemaah Islamiyah (JI), with extensive ties
to Al Qaeda, are known to have assisted two of the September 11, 2001 hijackers and
have confessed to plotting and carrying out attacks against Western targets. These
include the deadliest terrorist attack since September 2001: the October 12, 2002
bombing in Bali, Indonesia, that killed approximately 200 people, mostly Westerners.
On September 9, 2004, a suicide bombing attack thought to be the work of Jemaah
Islamiya struck the Australian Embassy in Jakarta, killing 10 and wounding around
200. The attack suggests that JI remains capable of carrying out relatively large-scale
plots against “hard” Western targets, despite the arrest or death of hundreds of JI
members, including most of its known leadership.
To combat the threat, the Bush Administration has pressed countries in the
region to arrest suspected terrorist individuals and organizations, deployed over 1,000
troops to the southern Philippines to advise the Philippine military in their fight
against the violent Abu Sayyaf Group, increased intelligence sharing operations,
restarted military-military relations with Indonesia (including restoring International
Military Education and Training [IMET]), and provided or requested from Congress
over $1 billion in aid to Indonesia and the Philippines.
The responses of countries in the region to both the threat and to the U.S.
reaction generally have varied with the intensity of their concerns about the threat to
their own stability and domestic politics. In general, Singapore, Malaysia, and the
Philippines were quick to crack down on militant groups and share intelligence with
the United States and Australia, whereas Indonesia began to do so only after attacks
or arrests revealed the severity of the threat to their citizens. That said, many
governments view increased American pressure and military presence in their region
with ambivalence because of the political sensitivity of the issue with both
mainstream Islamic and secular nationalist groups. Indonesia and Malaysia are
majority Muslim states while the Philippines and Thailand have sizeable, and
historically alienated and separatist-minded, Muslim minorities. This report will be
updated periodically.

---

Contents
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The 9/11 Commission’s Recommendations . . . . . . . . . . . . . . . . . . . . . 3
Background — The Rise of Islamic Militancy and Terrorism in Southeast Asia . 3
The Rise of Al Qaeda in Southeast Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Jemaah Islamiyah Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
History of Jemaah Islamiyah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Jemaah Islamiyah’s Relationship to Al Qaeda . . . . . . . . . . . . . . . . . . . . . . . . 7
Jemaah Islamiyah’s Size and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Major Plots and Attacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Trial of Baasyir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Recent Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Focus Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Shifts in Jakarta’s Counter-Terrorism Policy . . . . . . . . . . . . . . . . . . . . 15
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Phase One of U.S.-Philippine Military Cooperation . . . . . . . . . . . . . . 20
The MILF and the MNLF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The Philippine Communist Party (CPP) . . . . . . . . . . . . . . . . . . . . . . . 21
Phase Two of U.S.-Philippine Military Cooperation? . . . . . . . . . . . . . 22
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Violence Continues in Southern Provinces . . . . . . . . . . . . . . . . . . . . . 24
Central Government Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Possible Foreign Involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Criticism of Thaksin’s Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Tension in Regional Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Thailand as a Convenient Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
A New Front in the War on Terror? . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Reformed Homeland Security Apparatus and Counterterror Strategy . 31
Increased Intelligence Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Bilateral and Multilateral Cooperation . . . . . . . . . . . . . . . . . . . . . . . . 31
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Cambodia and Burma: New Countries of Convenience? . . . . . . . . . . . . . . 34
Options and Implications for U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Strategies for Combating Terrorism in Southeast Asia . . . . . . . . . . . . . . . . 35
Decapitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Military Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

---

Short- and Long-Term Capacity-Building Strategies . . . . . . . . . . . . . 37
Public Diplomacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Multilateral Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Role of Congress/Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
The “Leahy” Amendment Restriction on Military Aid . . . . . . . . . . . . 45
The Impact of 9/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
FY2005 Request for Indonesia, the Philippines, and Thailand . . . . . . . . . . 46
Other CRS Products Dealing with Terrorism in Asia . . . . . . . . . . . . . . . . . . . . . 48
Appendix A: U.S. Assistance to Indonesia, the Philippines, and Thailand
Since September 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Appendix B: Restrictions on Aid to Indonesia Since the “Leahy Amendment”
to the FY1992 Foreign Operations Appropriations Act . . . . . . . . . . . . . . . . 52
FY2002 Foreign Operations Appropriations — Seven Criteria for
IMET and FMF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
FY2002 Supplemental Appropriation for Combating Terrorism
(P.L. 107-206/H.R. 4775) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
FY2003 Foreign Operations Appropriations (P.L. 108-7/H.J.Res. 2) 53
FY2004 Foreign Operations Appropriations (P.L. 108-199) . . . . . . . . 54
FY2005 Foreign Operations Appropriations (P.L. 108-447) . . . . . . . . 54
Appendix C: Maps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
List of Figures
Figure 1. Map of Jemaah Islamiyah’s Operations . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 2. Southeast Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Figure 3. Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Figure 4. Malaysia and Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Figure 5. The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Figure 6. Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
List of Tables
Table 1. U.S. Assistance to Indonesia, FY2002-FY2005 . . . . . . . . . . . . . . . . . . 49
Table 2. U.S. Assistance to the Philippines, FY2002-FY2005 . . . . . . . . . . . . . . 50
Table 3. U.S. Assistance to Thailand, FY2002-FY2005 . . . . . . . . . . . . . . . . . . 51

---

Terrorism in Southeast Asia
Recent Developments
On December 17, 2004, Congressional legislation, that seeks to address the war
against terrorism in ways that would affect its prosecution in Southeast Asia, became
Public Law 108-458, the Intelligence Reform and Terrorism Prevention Act of 2004.
P.L. 108-458 addresses a number of issues identified by the 9/11 Commission Report
including the need to identify and eliminate terrorist sanctuaries, to increase
engagement between America and Muslim peoples, to support public education in
Muslim states, to foster scholastic exchange with Muslim states, to promote
economic policies to encourage development of open societies, to engage foreign
governments in developing a comprehensive multilateral strategy to fight terrorism,
and to track terrorist financing among other provisions.
Other key recent developments include the bombing of the Australian Embassy
in Jakarta and the election of Susilo Bambang Yudhoyono (SBY) to be the new
President of Indonesia. Two Malaysian members of Jemaah Islamiyah (JI), Azahari
bin Husin and Noordin Mohammad Top, are being sought for their role in planning
the suicide bombing attack against the Australian Embassy in Jakarta on September
9, 2004, that killed 10 and wounded over 200. Both were also allegedly involved in
the Bali bombing of October 2002, that killed over 200, as well as the August 2003
bombing of the Marriott Hotel in Jakarta, which left 12 dead.1 The trial of JI leader
Baasyir also continued into 2005 in Indonesia with the prosecution having difficulty
getting witnesses to testify against Baasyir. The Indonesian General Elections
Commission declared SBY the winner of the September 20, 2004 presidential run-off
election with 60.2 % of the vote as compared to former President Megawati
Sukarnoputri’s 39.38%.2 SBY placed emphasis on fighting corruption and enhancing
security during his campaign.3 The December 26, 2004, tsunami that devastated
much of Aceh, Indonesia, led Islamist extremists, some with ties to JI, to go to Aceh
to assist the victims and promote their agenda.
1 Lely Djuhari, “Alleged Malaysian Pair of Bomb Makers Wanted in Australian Embassy
Blast Have Eluded Capture Before,” Associated Press, 16 September, 2004.
2 “Susilo Bambang Yudhoyono Declared President Elect,” Antara Morning News Digest,
October 5, 2004.
3 Muklis Ali, “Indonesia’s Yudhoyono Sets Sights on Graft, Security,” Reuters, 1 October,
2004.

---

CRS-2
Overview
Since the September 11, 2001 terrorist attacks, the United States has considered
Southeast Asia to be a “second front” in its global campaign against Islamist
terrorism.4 U.S. attention in the region has been focused on radical Islamist groups
in Southeast Asia, particularly the Jemaah Islamiyah terrorist network, that are
known or alleged to have ties to the Al Qaeda network. As detailed in the narrative
section of the Final Report of the National Commission on Terrorist Attacks Upon
the United States (known as the “9/11 Commission”), among other sources, many of
these groups threaten the status quo of the region by seeking to create independent
Islamic states in majority-Muslim areas, overthrow existing secular governments,
and/or establish a new supra-national Islamic state encompassing Indonesia,
Malaysia, Singapore, the southern Philippines, and southern Thailand.5 In pursuit of
these objectives, they have planned and carried out violent attacks against civilian
and non-civilian targets, including American and other Western institutions.
Additionally, Al Qaeda has used its Southeast Asia cells to help organize and finance
its global activities — including the September 11 attacks — and to provide safe
harbor to Al Qaeda operatives, such as the convicted organizer of the 1993 bombing
of the World Trade Center, Ramzi Yousef.
Combating anti-American terrorism in Southeast Asia presents the Bush
Administration and Congress with a delicate foreign policy problem. Most regional
governments also feel threatened by home-grown or imported Islamic militant groups
and therefore have ample incentive to cooperate with the U.S. antiterrorist campaign.
Despite mutual interests in combating terrorism, Southeast Asian governments have
to balance these security concerns with domestic political considerations. Although
proponents of violent, radical Islam remain a very small minority in Southeast Asia,
many governments view increased American pressure and military presence in their
region with ambivalence because of the political sensitivity of the issue with both
mainstream Islamic and secular nationalist groups. The rise in anti-American
sentiment propelled by both the U.S.-led invasion and occupation of Iraq and many
Southeast Asian Muslim’s perceptions of America’s stance on the Israeli-Palestinian
conflict as “blatantly pro-Israel”6 makes it even more difficult for most governments
to countenance an overt U.S. role in their internal security. The challenge is to find
a way to confront the terrorist elements without turning them into heroes or martyrs
in the broader Southeast Asian Islamic community. Furthermore, the continued
activities of Al Qaeda and Jemaah Islamiyah will require a coordinated, international
response in a region where multinational institutions and cooperation are weak.
4 In the days after the September 11 attacks, at least one senior Pentagon official floated the
idea of taking military action against terrorist targets in Southeast Asia as a “surprise”
alternative to attacking Afghanistan. The 9/11 Commission Report. Final Report of the
National Commission on Terrorist Attacks Upon the United States (New York: W.W.
Norton & Co., 2004), p. 559, note 75; Douglas Feith, “A War Plan That Cast A Wide Net,”
Washington Post, August 7, 2004.
5 The 9/11 Commission Report.
6 Daljit Singh,”The Terrorist Threat in Southeast Asia,” Regional Outlook; 2003-2004.

---

CRS-3
The 9/11 Commission’s Recommendations. In July 2004, the 9/11
Commission’s issued its final report on the terrorist threat to the United States.
Although the report does not focus extensively on terrorism in Southeast Asia — the
bulk of its international sections are devoted to the Middle East, Afghanistan, and
Pakistan — the narrative section of the report shows the role Southeast Asia played
in Al Qaeda’s rise. Furthermore, many of the report’s recommendations for U.S.
counterterrorism policy in general are applicable to U.S. policy in Southeast Asia.
These areas of convergence are discussed in the “Options and Implications for U.S.
Policy” section below.
Background — The Rise of Islamic Militancy and
Terrorism in Southeast Asia
Southeast Asia has been the home of indigenous Islamic militant groups for
decades. Traditionally, the linkages among these groups were relatively weak, and
most operated only in their own country or islands, focusing on domestic issues such
as promoting the adoption of Islamic law (sharia) and seeking independence from
central government control. The Philippines has had a violent Muslim separatist
movement for more than a century. The Moros of Mindanao and the Sulu
Archipelago, including the island of Jolo, fought a stubborn, bloody, and ultimately
futile insurgency against the American occupation of the southern Philippines
following the Spanish American War (1898). Until recently, however, the activities
of several Muslim extremist groups in the Philippines had been confined mainly to
the relatively isolated Muslim-majority regions in the South.
In Indonesia, various schools of Islamic thought have competed for followers
and public attention, but most have not called for an Islamic state. The more radical
groups, which had their roots in anti-Dutch guerilla activities, effectively were kept
in check by strong leadership from Presidents Sukarno (1950-1965) and especially
Suharto (1967-1998). Moderate Islamic groups formed the main legal opposition to
the Suharto regime which ended in May 1998. Abdurrahman Wahid (Gus Dur), the
first democratically elected President after the collapse of the Suharto regime, and
Amien Rais, currently speaker of the upper house of parliament, are leaders of the
two largest Muslim political parties. Both have pursued a largely secular political
agenda. However, since Suharto’s fall, religious consciousness has been on the rise
among Indonesian Muslims, giving greater political space for radical groups and their
violent fringe to operate, at times openly.
In Malaysia, the late 1990s saw a potentially significant electoral swing toward
a radical Islamist party, Parti Islam se-Malaysia (PAS). However, PAS suffered
major setbacks in parliamentary elections in early 2004. The results appear to
indicate that mainstream Islam in Malaysia has reasserted its moderate character.
Prime Minister Abdullah Badawi, who is himself a respected Islamic Scholar, has
demonstrated Malaysia’s moderate Islamic approach since replacing former Prime
Minister Mahathir Mohammad.
The emergence of radical Islamic movements in Southeast Asia in the 1990s can
be traced to the conjunction of several phenomena. Among these were reaction to

---

CRS-4
globalization — which has been particularly associated with the United States in the
minds of regional elites — frustration with repression by secularist governments, the
desire to create a pan-Islamic Southeast Asia, reaction to the Israeli occupation in the
West Bank and Gaza Strip, and the arrival of terrorist veterans of years of fighting
in Afghanistan. The forging of connections between Al Qaeda and domestic radical
Islamic groups in Southeast Asia is part of this trend.
The Rise of Al Qaeda in Southeast Asia7
Since the early-to-mid 1990s the Al Qaeda terrorist network has made
significant inroads into the region. Al Qaeda’s Southeast Asian operatives — who
have been primarily of Middle Eastern origin — appear to have performed three
primary tasks. First, they set up local cells, predominantly headed by Arab members
of Al Qaeda, that served as regional offices supporting the network’s global
operations. These cells have exploited the region’s generally lax border controls to
hold meetings in Southeast Asia to plan attacks against Western targets, host
operatives transiting through Southeast Asia, and provide safe haven for other
operatives fleeing U.S. intelligence services. Al Qaeda’s Manila cell, which was
founded in the early 1990s by a brother-in-law of Osama bin Laden, was particularly
active in the early-mid-1990s. Under the leadership of Ramzi Yousef, who fled to
Manila after coordinating the 1993 bombing of the World Trade Center in New York,
the cell plotted to blow up 11 airliners in a two-day period (what was known as the
“Bojinka” plan), crash a hijacked airliner into the Central Intelligence Agency’s
headquarters, and assassinate the Pope during his visit to the Philippines in early
1995. Yousef was assisted in Manila for a time by his uncle, Khalid Sheikh
Mohammed, the alleged mastermind of the September 11, 2001 attacks.8 In the late
1990s, the locus of Al Qaeda’s Southeast Asia activity appears to have moved to
Malaysia, Singapore, and — most recently — Indonesia. In 1999 and 2000, Kuala
Lumpur and Bangkok were the sites for important strategy meetings among some of
the September 11 plotters.9 Al Qaeda’s leadership also has taken advantage of
Southeast Asia’s generally lax financial controls to use various countries in the
region as places to raise, transmit, and launder the network’s funds. By 2002,
according to one prominent expert on Al Qaeda, roughly one-fifth of Al Qaeda’s
organizational strength was centered in Southeast Asia.10
7 For more on Al Qaeda, see CRS Report RL32223, Foreign Terrorist Organizations, by
Audrey Kurth Cronin, et. al.; CRS Report RS21529, Al Qaeda after the Iraq Conflict, by
Audrey Kurth Cronin; and CRS Report RL31119, Terrorism: Near Eastern Groups and
State Sponsors, 2002, by Kenneth Katzman.
8 Filipino police discovered the Bojinka plot, which was in the final stages, in January 1995
only because a fire broke out in Yousef’s apartment, filling it with poisonous gas from the
bomb-making chemicals. Yousef fled to Malaysia, was arrested in Pakistan, and extradited
to the United States, where he was sentenced to life imprisonment for his role in the 1993
bombing and the Bojinka plot. See The 9/11 Commission Report, p.147-48.
9 For examples of how the September 11 plot organizers traveled relatively freely throughout
Southeast Asia to hold meetings and case flights, see The 9/11 Commission Report, p. 156-
60.
10 Report to the UN Security Council by the Security Council Monitoring Group, ‘1267'
(continued...)

---

CRS-5
Second, over time, Al Qaeda Southeast Asian operatives helped create what may
be Southeast Asia’s first indigenous regional terrorist network, Jemaah Islamiyah
(JI), that has plotted attacks against Western targets. Jemaah Islamiyah is suspected
of carrying out the October 12, 2002 bombing in Bali, Indonesia, that killed
approximately 200 people, mostly Western tourists. Although JI does not appear to
be subordinate to Al Qaeda, the two networks have cooperated extensively.
Third, Al Qaeda’s local cells worked to cooperate with indigenous radical
Islamic groups by providing them with money and training. Until it was broken up
in the mid-1990s, Al Qaeda’s Manila cell provided extensive financial assistance to
Moro militants such as the Abu Sayyaf Group and the Moro Islamic Liberation Front
(MILF). Thousands of militants have been trained in Al Qaeda camps in Afghanistan
or in the camps of Filipino, Indonesian, and Malaysian groups that opened their doors
to Al Qaeda. Al Qaeda reportedly provided funds and trainers for camps operated
by local groups in Indonesia, Malaysia, and the Philippines. Indonesian intelligence
officials also accuse Al Qaeda of sending fighters to participate in and foment the
Muslim attacks on Christians in the Malukus and on Sulawesi that began in 2000.11
Al Qaeda operatives’ task was made easier by several factors: the withdrawal of
foreign state sponsors, most notably Libya, that had supported some local groups in
the 1970s and 1980s; the personal relationships that had been established during the
1980s, when many Southeast Asian radicals had fought as mujahideen in
Afghanistan; and the weak central government control, endemic corruption, porous
borders, minimal visa requirements, extensive network of Islamic charities, and lax
financial controls of some countries, most notably Indonesia and the Philippines.12
Over time, Al Qaeda’s presence in the region has had the effect of
professionalizing local groups and forging ties among them — and between them and
Al Qaeda — so that they can better cooperate. In many cases, this cooperation has
taken the form of ad hoc arrangements of convenience, such as helping procure
weapons and explosives.
The Jemaah Islamiyah Network
In the weeks after the September 11 terrorist attacks, a pan-Asian terrorist
network with extensive links to Al Qaeda was uncovered. The network, known as
Jemaah Islamiyah (Islamic Group), has cells in Malaysia, Singapore, Indonesia, the
Philippines, Australia, Thailand, and Pakistan. To achieve its goal of creating an
Islamic state in Southeast Asia (centered in Indonesia), Jemaah Islamiyah (JI) leaders
have formed alliances with other militant Islamist groups to share resources for
training, arms procurement, financial assistance, and to promote cooperation in
carrying out attacks. Specifically, there is considerable evidence that JI has engaged
10 (...continued)
Committee, Security Council Report S/2003/669, July 7, 2003, p. 15.
11 Zachary Abuza, “Terrorism in Southeast Asia,” in National Bureau of Asian Research,
Strategic Asia 2002-3.
12 Zachary Abuza, “Tentacles of Terror,” unpublished October 21, 2002 draft, p. 3.

---

CRS-6
in joint operations and training with the Filipino separatist group, the Moro Islamic
Liberation Front (MILF).13 Some reports indicate that JI camps may continue to
operate in MILF territory in Mindanao.14 Within Indonesia, the network has created
and/or trained local radical groups that have been involved in sectarian conflict in the
country’s outer islands.
In October 2002, shortly after the attack in Bali, the United States designated JI
as a foreign terrorist organization.15 Thereafter, the United Nations Security Council
added the network to its own list of terrorist groups, a move requiring all U.N.
members to freeze the organization’s assets, deny it access to funding, and prevent
its members from entering or traveling through their territories. Since December
2001, over 250 suspected and admitted JI members, including a number of key
leaders have been arrested. Many of these arrests have been due to more extensive
intelligence sharing among national police forces. The Bali bombing spurred
Indonesian officials to reverse their previous reluctance to take on the Jemaah
Islamiyah network.
History of Jemaah Islamiyah
The origins of the Jemaah Islamiyah network stretch back to the 1960s, when
its co-founders, clerics Abu Bakar Baasyir and Abdullah Sungkar, began demanding
the establishment of sharia law in Indonesia. The two considered themselves the
ideological heirs of the founder of the Darul Islam movement, the Muslim guerilla
force that during the 1940s fought both imperial Dutch troops and the secularist
Indonesian forces of Sukarno, Indonesia’s founding President who ruled from
1950-65. In the 1970s, the two men established Al Mukmin, a boarding school in
Solo, on the main island of Java, that preached the puritanical Wahhabi interpretation
of Islam founded and propagated in Saudi Arabia. Many suspected JI activists who
have been arrested are Al Mukmin alums. In 1985, Baasyir and Sungkar fled to
Malaysia, where they set up a base of operations and helped send Indonesians and
Malaysians to Afghanistan, first to fight the Soviets and later to train in Al Qaeda
camps. Sungkar and Baasyir formed JI in 1993 or 1994, and steadily began setting
up a sophisticated organizational structure and actively planning and recruiting for
terrorism in Southeast Asia. Sometime in the mid-1990s, Sungkar and Baasyir
apparently began to actively coordinate with Al Qaeda.
The fall of Indonesia’s Suharto regime in 1998 provided a major boost to JI.
Almost overnight, formerly restricted Muslim groups from across the spectrum were
able to operate. Baasyir and Sungkar returned to Solo, preaching and organizing in
13 See, for instance, Singapore Home Affairs Ministry White Paper, The Jemaah Islamiyah
Arrests and the Threat of Terrorism, J anuar y 7, 2003, p.7-9,
[http://www.mha.gov.sg/wp/complete.zip]; Abuza, “Terrorism in Southeast Asia,” in
National Bureau of Asian Research, Strategic Asia 2002-3.
14 Ellen Nakashima, “Indonesian Militants ‘Keep Regenerating’,” Washington Post, March
25, 2004.
15 For more on the designation process, see CRS Report RL32120, The “FTO List” and
Congress: Sanctioning Designated Foreign Terrorist Organizations, by Audrey Kurth
Cronin.

---

CRS-7
relative openness there. Simultaneously, Jakarta’s ability to maintain order in
Indonesia’s outer islands decreased dramatically, and long-repressed tensions
between Muslims and Christians began to erupt. In 1999 and 2000, the outbreak of
sectarian violence in Ambon (in the Malukus) and Poso (on Sulawesi) provided JI
with critical opportunities to recruit, train, and fund local mujahadeen fighters to
participate in the sectarian conflict, in which hundreds died.16 After the violence
ebbed, many of these jihadis became active members in Baasyir’s network. In 2000,
the network carried out bombings in Jakarta, Manila, and Thailand.
Jemaah Islamiyah’s Relationship to Al Qaeda
There has been considerable debate over the relationship between Jemaah
Islamiyah and Al Qaeda. Although many analysts at first assumed that JI is Al
Qaeda’s Southeast Asian affiliate, recent reporting — including leaks from
interrogations of captured JI and Al Qaeda operatives — have shown that the two
groups are discrete organizations with differing, though often overlapping,
agendas.17 Whereas Al Qaeda’s focus is global and definitively targets Westerners
and Western institutions, Jemaah Islamiyah is focused on radicalizing Muslim
Southeast Asia (starting with Indonesia) and some JI leaders are said to feel that
attacking Western targets — as Osama bin Laden has urged — will undermine this
goal.
That said, the two networks have developed a highly symbiotic relationship.
There is some overlap in membership. They have shared training camps in Pakistan,
Afghanistan, and Mindanao. Al Qaeda has provided JI with considerable financial
support.18 They shared personnel, such as when JI sent an operative with scientific
expertise to Afghanistan to try to develop an anthrax program for Al Qaeda.19 The
two networks have jointly planned operations — including the September 11 attacks
— and reportedly have conducted attacks in Southeast Asia jointly.20 Often, these
operations took the form of Al Qaeda’s providing funding and technical expertise,
while JI procured local materials (such as bomb-making materials) and located
16 Sidney Jones, “Indonesia Backgrounder: Jihad in Central Sulawesi,” International Crisis
Group Report No74, February 3, 2004.
17 Zachary Abuza, “Funding Terrorism in Southeast Asia: The Financial Network of Al
Qaeda and Jemaah Islamiyah,” NBR Analysis, December 2003, p.11-12; The 9/11
Commission Report, p. 150-52.
18 Sidney Jones, “Jemaah Islamiyah in South East Asia: Damaged but Still Dangerous,”
International Crisis Group Report No 63, August 26, 2003, p. 1; Abuza, “Funding Terrorism
in Southeast Asia,” p. 9.
19 The 9/11 Commission Report, p. 151. Yazid Sufaat is the individual JI sent to Kandahar.
20 Al Qaeda and JI leaders met in Southeast Asia for at least two critical meetings: One in
January 2000 in Kuala Lumpur, during which plans for the attack on the USS Cole and the
September 11 hijackings were discussed. The other occurred in Bangkok in January 2002,
during which an Al Qaeda representative reportedly sat in on the planning of the Bali
bombings.

---

CRS-8
operatives.21 Riduan Isamuddin (also known as Hambali), appears to have been a
critical coordinator in these joint operations, and his arrest in 2003 may have
curtailed JI-Al Qaeda cooperation. Finally, terrorist attacks in 2003 and 2004 in
Morocco, Turkey, and Spain may indicate that Al Qaeda’s anti-Western ideology
simply is inspiring individuals and local groups — such as JI and its affiliates — to
undertake terrorist acts.
Jemaah Islamiyah’s Size and Structure
The total number of core Jemaah Islamiyah members has been estimated to
range from 500 to several thousand.22 Its influence transcends these numbers,
however. Many more men have been educated at JI-run pesantrens (religious
boarding schools), where the Baasyir and Sungkar’s radical interpretation of Islam
is taught. JI also has avidly sought out alliances — which at times have been ad hoc
— with a loose network of like-minded organizations, and JI-run training camps
have upgraded the military skills and ideological fervor of smaller, localized groups.
In 1999, JI leaders reportedly established the Rabitatul Mujihidin (RM) of regional
jihadi groups, including representatives from Aceh, Thailand, Burma and
Bangladesh, with the goal of bringing new organizations into the JI family and to
coordinate jihad activities such as carrying out attacks, procuring arms, sharing
training resources, and pooling finances. The RM is thought to have held three
meetings, all in Malaysia between 1999 and late 2000.
Interrogations of Jemaah Islamiyah members have revealed a highly formalized
command structure. At its peak organizational strength in 2000 and 2001, JI was led
by a five-member Regional Advisory Council chaired by Hambali, an important
coordinator of JI and Al Qaeda activities. Baasyir and Sungkar served as spiritual
advisors. Beneath the council were several functional committees and four mantiqis
(loosely translated as regional brigades) that were defined not only by geography but
also by functional roles, including fundraising, religious indoctrination, military
training, and weapons procurement (see Figure 1). Each mantiqi, in turn, was
subdivided into at least three additional layers: battalions, platoons, and squads.23
21 The 9/11 Commission Report, p.151.
22 Zachary Abuza, “The War on Terrorism in Southeast Asia,” in Strategic Asia 2003-04,
(Seattle, WA: National Bureau of Asian Research, 2003), p. 333; Jones, “Jemaah Islamiyah
in South East Asia,” p. ii.
23 Jones, “Jemaah Islamiyah in South East Asia,” p. 27-28.

---

CRS-9
Figure 1. Map of Jemaah Islamiyah’s Operations
Al Qaeda
(Afghanistan/ Pakistan)
Abu Dhabi
Al Qaeda
(Middle East)
Indonesians and
Mantiqi 3
Malaysians traveled
to Afghanistan and
the Philippines, Brunei,
Pakistan to fight the
eastern Malaysia,
Soviet occupation
Kalimantan & Sulawesi
and/or train in Al
(Indonesia)
Qaeda camps.
Mantiqi 1
peninsular
Malaysia, Singapore,
southern Thailand
Mantiqi 4
Funding networks, with
Papua & Australia
links to financial centers
in Abu Dhabi and other
parts of the United Arab
Jemaah Islamiyah
Emirates.
Mantiqi 2
Jemaah Islamiyah's Operations
Java & Sumatra (Indonesia)
Source: Reproduced from Zachary Abuza, "The War on Terrorism in Southeast Asia," in Richard J.. Ellings and Aaron L. Friedberg with Michael Wills,
STRATEGIC ASIA 2003-04: FRAGILITY AND CRISIS, by permission from The National Bureau of Asian Research.

---

CRS-10
However, in practice, JI appears to function in a much less centralized fashion
than this structure might imply. The network’s goal of developing indigenous jihadis
meant that JI members often have worked with and/or created local groups outside
its control. It often is difficult to sort out the overlap among JI and other radical
groups. Additionally, regional leaders appear to have had a fair amount of autonomy,
and by necessity many of the individual cells were compartmentalized from one
another. This means that no single individual is indispensable. The arrest of many
if not most of JI’s top leaders appears to have accentuated these decentralized
tendencies by disrupting the network’s command and control structure.24
JI’s continued attacks in 2003 and 2004 indicates that it retains the ability to
carry out attacks despite the arrest or death of almost all of its former leaders.
Apparently, the network either has reconstituted its leadership, or is able to function
without central direction, or both. In the summer of 2004, Singapore’s Home Affairs
Minister Wong Kan-Seng indicated that JI is planning new attacks and has
replenished its leadership.25 The latter development appeared to be reinforced from
interrogations of suspected JI militants who reportedly told of training camps that
continued to be operating in Mindanao, which some analysts say are JI’s current
strategic base of operations and training.
The breakdown of JI’s hierarchy also may have exacerbated what one report, by
the International Crisis Group, has described as tensions between two factions over
the best strategy for waging jihad. A minority group, led by Hambali, is interested
in focusing on a broader anti-Western agenda similar to al Qaeda, and in effecting
change in the near term. For instance, in the ongoing sectarian strife on the island
of Sulawesi, many of these JI members have formed and aided a militia called
Mujahidin Kompak that has set up training camps and has sought to get recruits into
military battle as quickly as possible. Opposing this faction is a majority group
within JI, depicted as the “bureaucrats,” that sees these tactics as undermining its
preferred, longer-term strategy of building up military capacity and using religious
proselytization to create a mass base sufficient to support an Islamic revolution.26
The implication is that JI may not be as monolithic as commonly assumed, though
it is important to point out that the two camps’ goals are not necessarily mutually
exclusive. Hambali, for instance, is believed to have overseen JI’s involvement in the
communal conflicts in the Malukus in 1999.
Major Plots and Attacks
Jemaah Islamiyah first came to public attention in December 2001, when
Singapore’s Internal Security Department (ISD) raided two Singapore cells for
24 Jones, “Jihad in Central Sulawesi,” p.24; April 2004 e-mail correspondence with Zachary
Abuza.
25 Amit Chanda, “Officials in Singapore Warn that JI has Replenished Leadership,” WMRC
Daily Analysis, August 5, 2004.
26 Jones, “Jihad in Central Sulawesi,” p. 24-25. The 9/11 Commission Report (note 26 on
p.490) notes that during his interrogation, Khalid Sheikh Mohammed, Baasyir criticized
Hambali for focusing too heavily on Al Qaeda’s broader, global agenda at the expense of
accomplishing JI’s aims in Indonesia and Malaysia.

---

CRS-11
plotting bombing attacks against American, Australian, British, and Israeli
installations and citizens in Singapore. A video tape subsequently found by U.S.
forces in Afghanistan confirmed the Al Qaeda connection with the plot. Follow-on
arrests netted plotters in Malaysia and the Philippines. Reportedly, the JI cell in
Malaysia coordinated the plot, including the procurement of bomb-making materials,
preparing forged travel documents, and communications with Al Qaeda.
Subsequent investigation and arrests led the FBI to link Jemaah Islamiyah to the
September 11 attack on the United States. Two of the September 11 hijackers and
Zacarias Moussaoui, who is under U.S. indictment for his alleged involvement in the
September 11 plot, apparently visited Malaysia and met with cell members in 2000.
Additionally, the FBI claims that Malaysian cell members provided Moussaoui with
$35,000 and a business reference.
In June 2002, the Indonesian police arrested a suspected Al Qaeda leader,
Kuwaiti national Omar al-Farouq, at the request of the CIA and turned him over to
the U.S. military. After three months of interrogation, al-Farouq reportedly confessed
that he was Al Qaeda’s senior representative in Southeast Asia and disclosed plans
for other terrorist attacks against U.S. interests in the region. These included a joint
Al Qaeda/JI plan to conduct simultaneous car/truck bomb attacks against U.S.
interests in Indonesia, Malaysia, Singapore, the Philippines, Thailand, Taiwan,
Vietnam, and Cambodia around the one-year anniversary of the September 11
attacks.27 On the basis of this and other information, in September 2002, the Bush
Administration closed U.S. embassies in several countries for several days and raised
the overall U.S. threat level from “elevated” (yellow) to “high”(orange). Under
interrogation, Al-Farouq reportedly identified Baasyir as the spiritual leader of JI and
one of the organizers of the planned September 2002 attacks. For months, Malaysia
and Singapore had also accused Baasyir of being a leader of JI and had joined with
the United States in asking Indonesia to arrest him.
The Bali Bombings. The danger posed by Jemaah Islamiyah and Al Qaeda
was underscored by the October 12, 2002 bombings in a nightclub district in Bali
frequented by western tourists. Synchronized bomb blasts and subsequent fires in a
nightclub district popular with young tourists and backpackers killed approximately
200 and injured some 300, mainly Australians and Indonesians, but also including
several Americans as well as Canadians, Europeans, and Japanese. The bombings,
the most deadly since the September 11, 2001 attacks in the United States, appeared
to mark a shift in JI’s strategy; the FBI has reported that in early 2002, senior JI
leaders — meeting in Thailand — decided to attack “softer targets” in Asia such as
tourist sites frequented by Westerners.28
The Bali bombing spurred the Indonesian government to reverse its previous
reluctance to investigate JI. In the days after the blasts, senior Indonesian officials
acknowledged for the first time that Al Qaeda was operating in Indonesia and was
27 Romesh Ratnesar, “Confessions of an Al-Qaeda Terrorist,” Time, September 23, 2002.
28 Jay Solomon and James Hookway, “Bali Bomb Suspect Used Thailand as Staging Area,”
The Wall Street Journal, November 7, 2002.

---

CRS-12
cooperating with JI.29 With the substantial aid of Australian and U.S. investigators,
Indonesian police have arrested several suspects, including Ali Gufron (also known
as Mukhlas), who is thought to be a senior JI commander and an associate of Baasyir.
Trials began in the spring and summer of 2003. On August 7, 2003, Islamic militant
Amrozi was sentenced to death by an Indonesian court for his involvement in the
Bali bombings. The government also announced a series of decrees that strengthen
the hand of the government in dealing with terrorism. In the days after the bombing,
Indonesia also formally supported the United States’ petition to the U.N. that Jemaah
Islamiyah be added to the U.N.’s list of terrorist groups.
The Trial of Baasyir. The Bali bombing also spurred the Indonesian
government to arrest Baasyir. He had long been viewed by U.S. officials as directly
involved with terrorism, but until the Bali bombing the Indonesian government had
refused to acknowledge his role or arrest him for fear of an anti-government
backlash. Although several of those charged with carrying out the Bali attack have
implicated Baasyir in the attack, the lack of sufficient evidence led Indonesian
authorities to charge him with involvement in past terrorist plots, including an
attempt to assassinate Megawati Sukaranoputri when she was Vice-President.
Baasyir’s highly publicized trial began in the spring of 2003. Baasyir denies leading
JI, though he acknowledges training at his Al Mukmin school all of the 13 suspects
arrested in Singapore in December 2001.30 On September 3, 2003, an Indonesian
court convicted him of plotting to overthrow the Indonesian government but dropped
more serious charges, including accusations that he is the leader of Jemaah Islamiyah.
Baasyir was sentenced to four years in jail. Prosecutors had asked for a 15-year
sentence. In March 2004, the Indonesian Supreme Court reduced Baasyir’s sentence.
He was to be released in May 2004, but at the end of April, Indonesian police
announced that Baasyir had been declared a suspect in other terrorist attacks, which
allowed them to continue his detention. Some prominent Indonesians have said the
move came as a result of pressure from the United States and Australia.31 Ahmad
Syafii Maarif, leader of Muhammadiyah, is reported to have said that then-U.S.
Ambassador to Indonesia Ralph Boyce had asked for help in persuading then-
President Megawati to keep Baasyir in detention.32
An element of confusion in the case against Baasyir was added in July 2004,
when an Indonesian constitutional court ruled that a critical post-Bali anti-terrorism
law was unconstitutional, because it was applied retroactively. The case against
Baasyir has proceeded based on his rearrest in April. Baasyir is being retried for
involvement in acts of terrorism under Indonesia’s anti-terrorism law.33 In an odd
29 Ellen Nakashima and Alan Sipress, “Al Qaeda Linked to Blast by Official,” Washington
Post, October 15, 2002.
30 Abuza, “Tentacles of Terror,” p.72.
31 Raymond Bonner, “U.S. Pressure to Hold Militant Sets Off Outcry in Indonesia,” New
York Times, April 20, 2004.
32 “Baasyir Nonviolent: Muhammadiyah Chief,” The Jakarta Post, January 14, 2005.
33 “Ba’asyir, Lawyers Storm Out of Court,” Jakarta Post, January 28, 2005, and John
McBeth, “The Constitutional Court’s Ruling on Retroactive Use of Anti-terrorism Laws
(continued...)

---

CRS-13
twist, Baasyir and his lawyers walked out of the court room in protest after the judge
allowed sworn statements to be read in the absence of witnesses’ presence in the
courtroom. Baasyir could face the death penalty if convicted for his alleged
involvement in the Bali and Marriott bombings. The Al-Mukmin pesantren
established by Baasyir near Solo has been trying to project an image of moderation
by hosting a seminar on Islam and Globalization and inviting the Australian
Ambassador to the school.34
As the trial against Baasyir proceeded in mid-February 2005 it appeared that the
prosecution had a weak case against Baasyir. The prosecution called for only a
reduced sentence of eight years in jail instead of the death penalty. This may have
been the result of the prosecution’s in ability to get key witnesses to testify against
Baasyir.35 None of the 32 witnesses for the prosecution directly connected Baasyir
with the Bali or Marriott bombings, though some did connect Baasyir to JI training
camps in the southern Philippines.36 Only one witness testified that Baasyir was the
leader of JI.37
Recent Activities. JI has continued to plan attacks against Western targets.
In May and June 2003, for instance, three Muslim Thais were arrested for allegedly
planning to bomb Western embassies in Bangkok — including the U.S. embassy —
and Thai beach resorts popular among Western tourists. In July 2003, Indonesian
authorities arrested eight suspected JI members in connection with the seizure of a
large cache of explosives on the central Island of Java, but authorities indicated that
some of the bomb-making material had already made it to Jakarta. The suspects
reportedly said their targets were soft targets, such as hotels, churches, and shopping
malls. In their possession was found a map of the area in Jakarta that includes the
J.W. Marriott Hotel, where on August 5, 2003, a car bomb exploded, killing over ten
people — mostly Indonesians — and injuring dozens. Police investigations have
revealed that the number of deaths could have been an order of magnitude higher if
the attack had been carried out more competently. The raid also turned up evidence
that several U.S. companies were being targeted.38 Later that month, the JI and Al
Qaeda operative Hambali was arrested by Thai forces, reportedly acting on a tip from
the U.S. Central Intelligence Agency.
JI’s major plots and attacks appear to operate in roughly one-year cycles — the
Christmas bombings of 2000, the plot against the targets in Singapore in late 2001,
33 (...continued)
Splits Fraternity,” Far Eastern Economic Review, August 12, 2004.
34 “Muslim School with Bashir links Promotes Tolerant Image,” Radio Australia, August
4, 2004 and Tim Palmer, “Ambassador Rejects Invitation to Radical Cleric’s School,”
Australian Broadcasting Corporation, August 5, 2004.
35 “Bashir: A Strong Chance to walk Free,” Australian Associated Press, February 9, 2005.
36 Sian Powell, “Call for Baasyir Jail Term,” The Australian, February 9, 2005.
37 “Indonesian Prosecutors Ask for Eight-Year Jail Sentence for Bashir,” Voice of America,
February 8, 2005.
38 Richard Paddock, “U.S. Firms Targeted in Jakarta,” Los Angeles Times, August 11, 2003.

---

CRS-14
the Bali bombing in October 2002, and the Marriott bombing in August 2003.
Following this pattern, in September 2004, a suicide bomber thought to be a JI
member penetrated the outer security perimeter of the Australian Embassy in Jakarta.
The blast killed 10 and wounded around 200. Two Malaysian members of JI,
Azahari bin Husin and Noordin Mohammad Top, are being sought for their role in
planning the bombing. If JI indeed is responsible, it would indicate that the terrorist
network retains the ability to successfully carry out attacks against “hard” targets.
Citing the threat from JI, the State Department as of mid-January 2005 advised U.S.
citizens against non-essential travel to Indonesia, and warned that the terrorist threat
in the Philippines remained “high.” Americans were warned to “exercise caution”
in Thailand and Malaysia.
Focus Countries
Indonesia
Background. Indonesia’s attractiveness to Islamic terrorist groups appears to
derive primarily from weak central government control and considerable social and
political instability and its overwhelmingly Muslim population. Central government
control in Indonesia has been weakened since the 1997-99 Asian financial crisis and
the replacement of the authoritarian regime of President Suharto in 1998, which had
been in power since 1965, with a more democratic but weaker central government.
Indonesia’s former President Megawati, who was under pressure from Islamic
political parties, condemned anti-American violence and pledged to protect U.S.
assets and citizens but also publicly opposed the U.S.-led military campaigns in
Afghanistan and Iraq.39 The election of Susilo Bambang Yudhoyono in 2004 raised
hopes that the Indonesian central government would be both more assertive and more
effective in its counterterrorist activities. Muslim-Christian strife in the country’s
remote regions has attracted the involvement of foreign Islamic radicals, including,
apparently, some with Al Qaeda connections.
Although the overwhelming majority of Muslim Indonesians follow a moderate
form of Islam, fundamentalist Islamic theology is growing in popularity in Indonesia,
and radical groups have grown in influence by taking advantage of the country’s
many internal problems. These include separatist movements in several provinces,
a severe economic recession following the Asian financial crisis, an ongoing power
struggle among the Indonesian elite for control of the government, and clashes
between Christians and Muslims. Radical groups such as Laskar Jihad and the
Islamic Defenders Front also reportedly have received assistance from elements
within the Indonesian military (TNI) in organizing, securing arms, and transport to
locales throughout the Indonesian archipelago.40
39 Richard Paddock, “Indonesia Presses U.S. to Stop Bombing Asia,” Los Angeles Times,
November 2, 2001.
40 “Al-Qaida Planned Indonesia Attack,” Associated Press, January 23, 2002. This report
cites Indonesian military sources and western intelligence sources that the Indonesian army
(continued...)

---

CRS-15
Even the more extreme groups traditionally have been concerned primarily with
domestic issues such as promoting the adoption of Islamic law (sharia). In the 1999
national elections, only a small minority of the Muslim parties favored radical
Islamic agendas, and overall the Muslim parties drew less than one-fifth of the vote.
More recently, however, the U.S.-led campaign against terrorism and war in Iraq
have had negative political resonance with a variety of groups currently jockeying for
power and influence. Former President Megawati reportedly feared cooperating too
closely with U.S. demands for arrests and other measures could leave her vulnerable
to attack not only by radical Islamists, but perhaps more importantly, by secular
nationalists.41
Observers are cautiously optimistic about the ability of Susilo Bambang
Yudhoyono to more effectively combat terrorism in Indonesia. The outcome of the
trial against Baasyir, as well as SBY’s ability to apprehend the Australian Embassy
bombers, will likely be viewed as key tests of his ability in this regard. Reports that
Islamist extremists have received assistance from the TNI, if true, may also be an
indication of the extent to which SBY will be able to counter growing extremism in
Indonesia.
Shifts in Jakarta’s Counter-Terrorism Policy. Until Indonesia’s policy
reversal following the October 2002 Bali bombing, U.S., Singaporean, and Malaysian
officials expressed dissatisfaction with the level of Indonesia’s cooperation against
terrorism. The Bali attack spurred Indonesia to take the terrorism threat more
seriously. Jemaah Islamiyah’s killing of Indonesian civilians was likely a key factor
in the Indonesian government’s decision to take a much stronger stand and cooperate
with U.S. authorities, despite a marked fall in Indonesians’ favorable impressions of
the United States (discussed below). In addition, the trial of Baasyir has brought
much evidence of terrorist activities to light, bringing home the extent of the terrorist
threat in Indonesia. The danger was highlighted in July 2003 by the J.W. Marriott
bombing, which was preceded by several arrests, including an Indonesian police raid
that uncovered a possible JI assassination plot of four members of the Peoples
Representative Council (DPR).42 The limits of the government’s commitment to
prosecuting the war on terror in an election year were demonstrated by the reduction
of Baasyir’s sentence. Mitigating against backtracking by the government on its
counterterror stance is Indonesia’s need for foreign investment from abroad and the
perception that Islamist extremists are a threat to the nationalists political position.
President Bush’s three-hour visit to Bali on October 22, 2003, was designed to
strengthen bilateral counterterror ties. In a joint statement, Bush and President
Megawati pledged “to enhance their bilateral cooperation in the fight against
terrorism, including through capacity building and sharing of information,”
40 (...continued)
committed at least $9.3 million to finance Laskar Jihad.
41 December 2002 conversation with Zachary Abuza.
42 “A Number of Pesantrens in Central Java Targets,” Jakarta Suara Pembaruan, July 16,
2003, FBIS.

---

CRS-16
specifically referring to military-to-military relations43 (see the “Options and
Implications for U.S. Policy” section below). President Bush also announced a $157
million program to help improve the quality of Indonesian schools by strengthening
secular public education. The initiative is aimed at reducing the influence of Muslim
boarding schools, some of which preach a radical brand of Islam that calls for the
establishment of sharia law, sometimes through violent means. A number of these
schools are run by suspected or confessed JI members, who use them to identify and
recruit members. President Bush’s visit was followed by visits from Attorney General
John Ashcroft and Secretary for Homeland Security Tom Ridge. Ashcroft attended
a regional counter terrorism conference co-hosted by Australia and Indonesia in Bali
in February 2004. Representatives from 26 nations attended the conference.44
Ashcroft did not accede to Indonesian requests to give Indonesia access to Hambali.45
The United States and Indonesia presently cooperate on counterterrorism in a
number of areas with assistance going to the police and security officials,
prosecutors, legislators, immigration officials, banking regulators and others. U.S. -
Indonesian counterterror capacity building programs have included funding for the
establishment of a national police counterterrorism unit, counterterrorism training for
police and security officials, financial intelligence unit training to strengthen anti-
money laundering, train counterterror intelligence analysts, and an analyst exchange
program with the Treasury Department. Other programs include training and
assistance to establish a border security system as part of the Terrorist Interdiction
Program; and regional counterterrorism fellowships to provide training on
counterterrorism and related issues to the Indonesian military.46
U.S. counterterror capacity building programs with Indonesia for FY2005
include counterterror training with the Indonesian National Police Unit “Special
Detachment 88.” For this purpose $5 million has been allocated in FY 05. The
Counterterror assistance program includes training in Counterterrorism Investigation,
Explosives Incidents Countermeasures, Crisis Response, train the trainer programs
and recently completed physical improvements to the National Police Headquarters
with training being provided through the Diplomatic Security Anti-Terrorism
Assistance Program. An additional $600,000 has been allocated for the DoD
Regional Counterterrorism Fellowship program in FY2005.47
The United States’ popularity amongst Indonesians has dropped significantly
in recent years. According to polling data, 79% of Indonesians had a favorable
43 “Joint Statement Between the United States of America and the Republic of Indonesia,”
The White House, October 22, 2003.
44 Bhimanto Suwastoyo, “Ministers, Officials from 26 Nations Launch Anti-terror
Conference,” Agence France Presse, February 4, 2004.
45 Steven Gutkin, “Ashcroft Urges Asia Help in Terror Fight,” Associated Press, February
4, 2004.
46 Information drawn from State Department Fact Sheet “Summary of Counter Terrorism
Assistance for Indonesia,” 10/03 update.
47 Office of the Coordinator for Counterterrorism, “Fact Sheet: Summary of
Counterterrorism Assistance for Indonesia,” February 2005.

---

CRS-17
opinion of the United States in 1999, 61% did in 2002, and only 15% did in 2003.48
Another poll stated that 83% of Indonesians took an unfavorable view of the United
States in 2003.49 Some Indonesian analysts view the United States as focused on the
“search and destroy” aspect of the war against terror and feel that the United States
has not focused sufficient attention to winning the “hearts and minds” aspect of the
struggle, particularly in regard to U.S. policy towards the Israel-Palestinian issue.50
Recent Developments. In 2004 Indonesia focused on a series of elections
that led to only limited gains by Islam-based parties. With 33.57% of the vote,
Democratic Party leader Susilo Bambang Yudhoyono, a retired general and former
Security Minister, and his running mate Jusuf Kalla, received more votes than any
other candidate in the first round of the presidential election.51 A final round between
Yudhoyono and current President Megawati Sukarnoputri of the Indonesian
Democratic Party of Struggle (PDI-P), who polled 26.61% of the vote in the first
round, held on September 20, 2004, led to Yudhoyono’s victory. In the election,
Islam-based parties increased their appeal among Indonesian voters from 16% in the
1999 election to 21.34% in the 2004 election.52 They did this in part by downplaying
their overtly Islamist message and instead focusing on anti-corruption and good
governance. Some analysts believe these limited gains by Islam based parties will not
act as a significant impediment to Indonesian actions in the war against terror.
Yudhoyono reportedly favors strengthening the legal system and coordination
in law enforcement as well as addressing the underlying economic and social forces
that contribute to terrorism as a way of dealing with the threat.53 President
Yudhoyono has made the capture of Noordin Mohamad Top and Azahari Husin a key
priority for the beginning of his administration. The two are thought to have
constructed the bombs used in the Bali, Marriott and Australian Embassy bombings.
They were reportedly almost arrested as the result of an operation mounted in January
2005. Expectations are tending to the view that Indonesia will be better positioned
to more effectively deal with Islamist extremists and terrorist groups under the
leadership of SBY.
In July 2004, there were significant developments in the case concerning the
killing of two Americans at the Freeport-McMoRan Copper and Gold Inc. mine near
Timika, West Papua, in August 2002. The case has been a key obstacle to improved
relations between Indonesia and the United States. U.S. officials reported growing
48 See Dan Gardner, “Bush is Losing the War for Hearts and Ninds,” The Ottawa Citizen,
March 13, 2004 and Ellen Nakashima, “U.S. Policy Censured in Indonesia,” The
Washington Post, October 21, 2003.
49 Tom Plate, “What if Bush Were to Face an Election in Asia,” Straits Times, January 19,
2004.
50 Philips Jusario Vermonte, “Coordination Needed to Fight Terrorism,” Center for Strategic
and International Studies-Jakarta, February 12, 2004.
51 “Presidential Election First Round Results,” U.S.-Indonesia Society, August 5, 2004.
52 Greg Fealy, “The 2004 Indonesian Elections,” Australian National University, data sheet.
53 Donald Greenless and John McBeth, “Terrorists New Tactic: Assassination,” The Far
Eastern Economic Review, June 17, 2004.

---

CRS-18
satisfaction with the level of assistance that the FBI was receiving from Indonesian
authorities in their investigation. Attorney General John Ashcroft reported in June
2004 that a U.S. grand jury, acting on information from the U.S. Federal Bureau of
Investigation (FBI), had indicted a Papuan, thought by some to be a member of the
Free Papua Movement (OPM), for the crime. The Attorney General also named the
OPM as a terrorist organization.54 Critics both in Indonesia and abroad have alleged
that the FBI overlooked information concerning the businessman’s long ties to the
TNI, and that the U.S. move was aimed at clearing the way for the restoration of
military-to-military assistance and the resumption of military assistance.55 Resolution
of the case may be essential for Congress to approve bilateral military ties to be fully
reestablished.56
Secretary of State Rice has reportedly decided to certify to Congress that
Indonesia is cooperating sufficiently on the Timika case. This will allow the United
States government to seek to develop closer ties with the Indonesian military by
allowing IMET training with Indonesian officers to proceed. The tsunami, which
devastated much of Aceh the day after Christmas 2004, is perceived by many to have
offered an opportunity for the Administration to seek to further defense ties with
Indonesia. The United States has already released spare parts for repair of Indonesian
transport aircraft.57 An indication that the debate on the extent to which the United
States should work with the TNI was shifting towards closer cooperation came in
February 2005 when the Washington Post took the position that “Congress should
remove restrictions on training.”58 In the view of the Washington Post, civilian
control over the military has increased as Indonesia’s democracy has grown stronger.
The tsunami that ravaged much of Aceh on December 26, 2004, has led to a new
radical Islamist presence in Aceh. A number of radical groups, some with ties to JI,
have traveled to Aceh to assist victims of the tsunami. Volunteers from the Islamic
Defenders Front (FPI) have worked with members of the Hizbut Tahrir, Medical
Emergency Rescue Committee (Mer-C) and MMI to restore damaged Mosques and
bury the dead.59 The Laskar Mujahidin (LM), which is linked to MMI which was
founded by Baasyir, is also thought to be operating in Aceh. Some analysts believe
that Laskar Mujahidin, which has been involved in inter-communal strife between
Muslims and Christians in Sulawezi, and the Islamic Defenders Front, received
assistance from the TNI in getting to Aceh. It is also thought by some that LM may
54 “Papuan Separatist Charged With the Murders of Two Americans, Attempted Murders of
Others During 2002 Ambush in Indonesia” U.S. Embassy, Jakarta, Indonesia. Department
of Justice Press Release, June 24, 2004.
[http://www.usembassyjakarta.org/press_rel/doj-papua.html]
55 “Rights Groups Accuse Ashcroft of Cover-Up.” Australian Financial Review, Aug. 5,
2004.
56 “Indonesia Military Aid Back on Table,” Far Eastern Economic Review, July 22, 2004.
57 Jane Perlez, “U.S. Takes Steps to Mend Ties with Indonesian Military,” New York Times,
February 7, 2005.
58 “Next Step with Indonesia,” The Washington Post, Febrary 8, 2005.
59 “Islamic Defenders Front’s Help in Aceh Aid Work Seen as Positive,” BBC News,
January 13, 2005.

---

CRS-19
have received assistance from elements from within TNI during the conflict in
Sulawezi. These groups favor an Islamic state in Indonesia and are anti-American
in their outlook. They are also critical of Western assistance that they perceive as
being Christian in orientation. A spokesman for MMI reportedly warned against the
hidden agenda of American and Australian soldiers in Aceh and compared their
presence to colonial invaders.60
Extremist groups that have come to Aceh from elsewhere in Indonesia may
have come to counter what they view as “infidel” influence. These groups have been
critical of Western efforts to establish orphanages out of fear that such efforts are
aimed at conversion of Muslim children. An estimated 15,000 children in Indonesia
were left parentless by the tsunami.61 The FPI has also been critical of foreigners
drinking alcohol. Hilmy Bakar Almascaty, Central Board Chairman of the FPI,
stated “if they [the foreign presence in Aceh] came here with some hidden agenda —
colonialism, imperialism, or missionary, I think this is very, very dangerous, and
very, very complicated.”62 Past efforts by Laskar Jihad and JI to become involved in
Aceh have been rejected by GAM. Though GAM supporters are devout Muslims,
they do not embrace the sort of radicalism embraced by JI.63 The Free Aceh
Movement, GAM, has described the FPI and MMI as “criminal organizations” that
“contradict Islamic teachings and the tolerance and the faith of Acheinese Muslims.”
GAM has also reportedly asserted that these groups are working with the TNI.64
The Philippines
The Philippines condemned the September 11, 2001 attacks and offered ports
and airports for use by U.S. naval vessels and military aircraft for refueling stops.
Philippine President Gloria Macapagal-Arroyo and President Bush agreed on the
deployment of U.S. military personnel to the southern Philippines to train and assist
the Philippine military against the terrorist Abu Sayyaf group. The two Presidents
announced on November 20, 2001, $92 million in U.S. military assistance and $55
million in U.S. economic aid for Muslim regions in the Philippines for 2001 and
2002.65
60 Mark Dodd, “Western Aid Winning Aceh’s Hearts: Bashir,” The Australian, January 12,
2005.
61 Marian Carroll, “Extremists Cast Cloud Over Plan by Australian to Build an Orphanage,”
South China Morning Post, January 12, 2005.
62 Masako Iijima aand Achmad Sukarsono, “Islamic Militants warn Aid Groups to Stick to
Job,” Reuters, January 11, 2005.
63 Damien Kingsbury,”Growing Doubts on Aceh’s Relief Effort,” The Australian, January
12, 2005.
64 “Aceh Separatists Denounce Militant Muslim Help,” Reuters, January 10, 2005.
65 Steven Mufson, “U.S. to Aid Philippines’ Terrorism War,” Washington Post, November
21, 2001; “Arroyo’s Meeting With Bush at White House, US Economic Package Reported,”
GMA 7 Television, November 21, 2001, translated by FBIS.

---

CRS-20
Phase One of U.S.-Philippine Military Cooperation. The number of
American military personnel deployed between January 2002 and July 31, 2002 was
nearly 1,200, including 150 Special Forces. The exercise, dubbed “Balikatan” or
“shoulder-to-shoulder,” included the deployment of over 300 troops, primarily Navy
engineers, to the Southern Philippines to undertake “civic action” projects such as
road-building on Basilan, an island that is the center of Abu Sayyaf’s activities. The
Balikatan exercise reportedly resulted in a significant diminishing of Abu Sayyaf
strength on Basilan. Armed Forces of the Philippines (AFP) operations improved as
a result of U.S. assistance in intelligence gathering, the supplying of modern
equipment, and aid in the planning of operations.66
In consideration of the Filipino Constitution’s ban on foreign combat troops
operating inside the country, Washington and Manila negotiated special rules of
engagement for the Balikatan exercise. U.S. Special Forces personnel took direction
from Filipino commanders and could use force only to defend themselves.
The Abu Sayyaf Group. Abu Sayyaf is a small, violent, faction-ridden
Muslim group that operates in the western fringes of the big island of Mindanao and
on the Sulu islands extending from Mindanao. It has a record of killings and
kidnappings and has had links with Al Qaeda. Abu Sayyaf kidnapped three
American citizens in May 2001. One was beheaded in June 2001. The family of the
other two, a missionary couple, the Burnhams, has disclosed that in March 2002 they
made a ransom payment of $300,000 to Abu Sayyaf, but the couple was not released,
presumably because the payment was mistakenly delivered to a rival Abu Sayyaf
faction. The payment reportedly was facilitated by U.S. and Philippine officials,
including the Federal Bureau of Investigation.67 In June, Filipino army rangers
encountered the Abu Sayyaf groups holding the Burnhams. In the ensuing clash, Mr.
Burnham and a Filipina female hostage were killed, but Mrs. Burnham was rescued.
The Philippine-U.S. Balikatan operation appears to have weakened Abu Sayyaf.
Its estimated manpower fell to 300-400; but it continued to operate in the Sulu
islands south of Basilan and in western Mindanao. In the spring of 2004, new
evidence surfaced that Abu Sayyaf is active in Manila, as well. In March 2004,
President Arroyo announced that the Philippine government had uncovered an Abu
Sayyaf plot to launch bombings in Manila. Philippine police arrested six alleged
plotters and seized 80 pounds of explosives. In April 2004, police officials
reportedly determined that a February 2004 ferry bombing, in which over 100 people
died, was the work of Abu Sayyaf and the Rajah Solaiman Movement, a group of
idealistic Filipino Muslim converts from the Manila area. Confessions from arrested
66 Gloria, Glenda M. “Training days.” Manila Newsbreak (internet version), July 8, 2002.
Schmitt, Eric. By aiding needy Filipinos, G.I.’s could help rout the rebels. New York Times,
June 15, 2002. p. A6.
67 Bonner, Raymond and Schmitt, Eric. “Philippine Officials Detail the Trap, Set with U.S.
Help, that Snared a Rebel Leader.” New York Times, September 22, 2002. p. NE16. Lerner,
Mark. “Hostage’s Father Says Abu Sayyaf Broke Deal.” Washington Times, April 26,
2002. p. A15.

---

CRS-21
suspects also reportedly revealed a plan, interrupted by the investigation, to attack a
Manila shopping mall.68
The MILF and the MNLF. The U.S. focus on Abu Sayyaf is complicated by
the broader Muslim issue in the southern Philippines, including the existence of two
much larger groups, the Moro National Liberation Front (MNLF) and the Moro
Islamic Liberation Front (MILF). Both groups have been in insurrection against the
Philippine government for much of the last 30 years. The MILF, with an estimated
armed strength of 10,000, has emerged as the larger of the two groups. Its main
political objective has been separation and independence for the Muslim region of
the southern Philippines. Evidence, including the testimonies of captured Jemaah
Islamiyah leaders, has pointed to strong links between the MILF and JI, including the
continued training of JI terrorists in MILF camps. This training appears to be
important to Jemaah Islamiyah’s ability to replenish its ranks following arrests of
nearly 500 cadre in Indonesia, Malaysia, and Singapore.69 MILF leaders deny links
with JI; but here are many reports linking some local MILF commands with the
terrorist organization.
The MILF has had tenuous cease-fire agreements with the Philippine
government. The government and the MILF concluded a new truce agreement in
June 2003. There has been a substantial reduction in violence and armed clashes
under the truce. However, there continues to be evidence that the MILF provides
training facilities to JI.70 Under the truce, a Malaysian observer team visited MILF
camps in March 2004 and warned MILF leaders to end ties to Jemaah Islamiyah.
The Malaysian team was a forerunner of a larger team of international observers that
began to monitor the cease-fire in October 2004 — and presumably MILF-JI
relations. A new round of Philippine government-MILF political talks are to be held
in early 2005. President Bush promised U.S. diplomatic and financial support if the
MILF were sincere in seeking a negotiated settlement.71
The Philippine Communist Party (CPP). The CPP, the political head of
the New Peoples Army (NPA), also has called for attacks on American targets and
claims responsibility for the murder of an American hiker and the firing on an
American transport aircraft in January 2002 on the island of Luzon. The Bush
Administration placed the CPP and the NPA on the official U.S. list of terrorist
organizations in August 2002. It also pressured the government of the Netherlands
to revoke the visa privileges of Communist Party leader, Jose Maria Sison, and other
CPP officials who have lived in the Netherlands for a number of years and reportedly
direct CPP/NPA operations.
68 James Hookway, “A Dangerous New Alliance,” Far Eastern Economic Review, May 6,
2004.
69 John McBeth, “Across Borders,” Far Eastern Economic Review, July 22, 2004. p. 27.
70 “Terror threats.” Manila Business World (internet version, March 24, 2004. “Malaysia
holds six Indonesian Islamist militants.” Reuters News Agency, March 6, 2004.
71 Bumiller, Elisabeth. “Bush Affirms U.S. Is Ready to Send Troops to the Philippines.”
New York Times, May 20, 2003. p. A15.

---

CRS-22
Phase Two of U.S.-Philippine Military Cooperation? The United States
and the Philippines have attempted to negotiate a second phase of U.S. training and
support of the AFP since late 2002. The negotiations have experienced difficulties
in determining the “rules of engagement” for U.S. personnel and the terminology to
be used in describing Philippine-U.S. cooperation. The basic issue has been whether
any facets of the U.S. role could be considered a combat role. The two sides initially
announced that U.S. training of AFP light reaction companies would take place in
northern Luzon and again on Mindanao. The objective was to train 16 light infantry
companies by the end of 2003 for use against both Muslim insurgents and the NPA.
Funding was to come from a $25 million military aid package included in the
FY2002 emergency supplemental appropriations. In July 2002, the two governments
decided that, except for aerial surveillance, U.S. military personnel would not be
involved in the stepped-up Philippine military campaign against Abu Sayyaf on Jolo
Island south of Basilan where Abu Sayyaf has concentrated strength. President
Arroyo favored greater U.S. involvement, but U.S. military leaders reportedly had
reservations.72
However, continued Abu Sayyaf bombings led the Defense Department to
consider a more extended U.S. assistance program in the southern Philippines,
focusing on the Abu Sayyaf concentrations on Jolo. U.S. officials also cited stronger
evidence of connections between Abu Sayyaf and international terrorist groups. In
February 2003, Pentagon officials described a plan under which the United States
would commit 350 Special Operations Forces to Jolo to operate with Filipino Army
and Marine units down to the platoon level of 20-30 troops. Another 400 support
troops would be at Zamboanga on the Mindanao mainland. Positioned offshore of
Jolo would be a navy task force of 1,000 U.S. Marines and 1,300 Navy personnel
equipped with Cobra attack helicopters and Harrier jets.73
The Pentagon description of the plan was that U.S. troops would be in a combat
role. This and subsequent statements indicated that the Special Operations Forces
on Jolo would participate in AFP offensive operations against Abu Sayyaf and that
the Special Operations Forces would not be limited to using their weapons for self-
defense. The U.S. Marines were described as a “quick reaction” force, undoubtedly
meaning that they could be sent on to Jolo to reinforce AFP units. The Cobra
helicopters and Harrier jets would give AFP commanders the option of requesting
U.S. air strikes in support of AFP operations or transporting Filipino troops on U.S.
helicopters.
These rules of engagement went beyond the U.S. role on Basilan in 2002. In
that exercise, there was no offshore Marine and naval air capability, and the plan for
U.S. Special Operations Forces on patrol with AFP units restricted their use of
weapons only for self-defense. That plan never was implemented on Basilan; U.S.
forces did not participate in AFP patrols. Moreover, the Basilan operation set a
72 Villanueva, Mirichu and Pareno, Roel. “Arroyo Scolds US General.” Philippine Star
(internet version), July 11, 2002. “New US-Philippine Exercises Against Rebels Planned.”
Reuters News Service report, July 10, 2002.
73 Graham, Bradley. “U.S. Bolsters Philippine Force.” Washington Post, February 21, 2003.
p. A1.

---

CRS-23
deadline of July 1, 2002, whereas Pentagon officials asserted that the Jolo operation
would have no time limit.
President Arroyo and AFP commanders reportedly had agreed to the plan for a
second phase of U.S.-Philippine joint military activity in a meeting on February 4,
2003.74 The announcement of the plan caused immediate controversy in the
Philippines. Filipino politicians and media organs criticized the plan as violating the
constitutional prohibition of foreign troops engaging in combat on Philippine soil.75
Filipino Muslim leaders warned of a Muslim backlash on Mindanao. Filipino experts
and civic leaders on Jolo warned that the people of Jolo would not support a U.S.
combat role, partly because of the history of U.S. military involvement. During the
Philippine wars following the U.S. annexation of the Philippines in 1898, U.S. forces
commanded by Generals Leonard Wood and John J. Pershing conducted extensive
combat operations against Muslim forces on Jolo, inflicting thousands of civilian
casualties.
At the end of February 2003, the Bush and Arroyo administrations decided to
put the plan on hold and re-negotiate the rules of engagement for U.S. forces. In May
2003, U.S. military officials said that the joint cooperation program aimed at Abu
Sayyaf on Jolo would be delayed until the new training was completed. During
Arroyo’s official state visit to the White House on May 19, 2003, the United States
announced a new $65 million program for the training of several AFP battalions (and
$30 million for economic aid on Mindanao), and designated the Philippines a Major
Non-NATO Ally.76 During his one-day visit to Manila in October 2003, President
Bush described the U.S.-Philippines military alliance as a “rock of stability in the
Pacific” and committed the United States to “provide technical assistance and field
expertise and funding” to help modernize the Philippines military. He also stated that
the United States and the Philippines have a common objective of bringing Abu
Sayyaf to justice and to continue to work together to dismantle JI.77 Philippine-U.S.
talks in early 2004 reportedly focused on U.S. assistance to Filipino law enforcement
and police capabilities. However, the Bush Administration reportedly pressed the
Philippine government to move more assertively against Abu Sayyaf.
Thailand
Recent developments have reinforced concern about the growing incidence of
both indigenous and transnational terrorism in Thailand. JI leader Hambali’s arrest
outside Bangkok in August 2003 and ongoing violence in Thailand’s predominantly
74 Nakashima, Ellen and Graham, Bradley. “Missed Signals Forced Suspension of U.S.-
Philippine Mission.” Washington Post, March 3, 2003. p. A12.
75 Nakashima, Ellen. “Philippines Debates U.S. Combat Role Against Rebels.” Washington
Post, February 23, 2002. p. A30.
76 Major Non-Nato Ally status allows the U.S. and the designated country to work together
on military research and development and gives the country greater access to American
defense equipment and supplies.
77 “Remarks by the President to the Philippines Congress,” Manila, Philippines, October 18,
2003. [http://www.whitehouse.gov].

---

CRS-24
Muslim southern provinces have intensified the focus on Islamic extremism in the
country. These developments have prompted action from Thai government officials
and renewed questions about links to broader networks. Prime Minister Thaksin
Shinawatra has come under fire for his handling of the situation in the south.
Violence Continues in Southern Provinces. Since January 2004,
sectarian violence in Thailand’s majority-Muslim provinces between insurgents and
Thai security forces has left over 550 people dead.78 Most of the civilian victims
have been Buddhist Thais, particularly monks and teachers; others were police and
military personnel. The southern region, which includes the provinces of Yala,
Narathiwat, and Pattani, has a history of separatist violence, though the major
movements were thought to have died out in the 1990s. Thai Muslims have long
expressed grievances for being marginalized and discriminated against; the area has
lagged behind the rest of Thailand in economic development and contributes only
1.4% of the country’s GDP.
After a series of apparently coordinated attacks in early 2004, the central
government declared martial law in the region and sent 3,000 troops south. (The
number has since grown to over 15,000, with an additional 10,000 committed for the
one-year anniversary of the upsurge in violence.) A pattern of insurgent attacks —
targeted shootings or small bombs that claim a few victims at a time — and counter-
attacks by the security forces has developed. The pattern crystallized into two major
outbreaks of violence in 2004: on April 28, Thai soldiers killed 108 insurgents,
including 34 lightly-armed gunmen in a historic mosque, after they attempted to
storm several military and police outposts in coordinated attacks; and, on October 25,
84 local Muslims were killed: six shot during an erupting demonstration at the
Takbai police station and 78 apparently asphyxiated from being piled into trucks after
their arrest.79 The insurgents retaliated with a series of more gruesome killings,
including beheadings, following the Takbai incident.
Central Government Response. In addition to the sizeable military
dispatch, Bangkok has adopted measures designed to soften criticism that the
government has relied too heavily on military force. The Thaksin Administration
approved a $500 million economic development program for the region, although
local sources complain that the funds have yet to be dispersed.80 It also announced
plans to sponsor more Islamic schools and ban the use of foreign funds and
discourage foreign influence in the schools. Reflecting a belief that the violence is
being fomented in madrasses with foreign links, police have arrested several
Indonesia-educated teachers in the Islamic schools. After public outcry over the
deaths of Muslim youths by Thai troops, government-commissioned independent
investigations of the April and October incidents led to the dismissal or reassignment
78 Reports from BBC News , The Los Angeles Times.
79 Independent forensic experts said that the men died piled on top of each other with their
hands tied behind their backs. See Mydans, Seth. “Thai King Urges Premier to Be More
Lenient in the Muslim South, “ New York Times. November 2, 2004.
80 Anthony L. Smith. “Trouble in Thailand’s Muslim South: Separatism, not Global
Terrorism,” Asia Pacific Security Studies Volume 3, Number 10. December 2004.

---

CRS-25
of some officials, but largely acquitted the security forces of any intentional
misconduct.
Possible Foreign Involvement. Many regional observers view the
movement as a confluence of different groups: local separatists, Islamic radicals,
organized crime, and corrupt police forces. The sophistication and coordination of
the attacks support the notion that broader networks are involved, but the history of
resentment in the region among minority Muslims toward the central government
points to a domestic impetus. Organizations such as Pulo (the Pattani United
Liberation Organization), BRN (the Barisan Revolusi Nasional), and GMIP (Gerakan
Mujahadeen Islam Pattani), earlier assumed to be defunct, were linked to Jemaah
Islamiah (JI) in the past. An organization called “Bersatu” claims to be an umbrella
grouping for all the insurgent factions, but appears to have very limited authority over
the disparate networks.81 Some experts say that an evolving sense of pan-national
Islamic identity has shifted the focus of the movement in the southern provinces from
local autonomy to international jihadism. In addition, separatist groups in the region
have reportedly received financial support from groups in other Islamic countries,
and some of the leaders trained in camps in Libya and Afghanistan.82
There are indications of JI presence in Thailand,83 particularly given the 2003
arrests of Hambali, a radical figure with suspected ties to Al Qaeda, and of three
Islamic leaders suspected of planning to attack foreign embassies and tourist
destinations. One prominent anti-terrorism expert has called attention to a previously
unknown underground network, called Jemaah Salafiya, that allegedly is affiliated
with JI.84 Under interrogation, captured Al Qaeda operative Omar al-Farouq
reportedly confessed to attempting to cooperate with GMIP.85
Most analysts stress that there is no convincing evidence to date of serious JI
involvement in the attacks in the southern provinces. Many experts concur, however,
that sectarian violence involving local Muslim grievances provides a ripe
environment for JI to become more engaged in the struggle. Such experts have
warned that outside groups, including JI and other militant Indonesia-based groups,
may attempt to exploit public outrage with events like the October 5 deaths to forge
alliances between local separatists and regional Islamic militants.86 Some analysts
believe that the heavy-handed response by the Thai security forces, with the open
81 “Thai Separatists Leader Reaches Out for Talks with Government,” Xinhuanet. May 22,
2004.
82 Ibid.
83 Regional terrorism experts have pointed to linkages to JI in Thailand through the group
Jemaah Salafi, which reportedly had contact with Hambali as he was planning major
bombings in Bangkok; through personal ties with various secessionist leaders; and through
the participation in the attacks of several foreign nations with JI ties.
84 Ellen Nakashima, “Terrorists Find Easy Passage Into Thailand,” Washington Post.
January 27, 2003.
85 Zachary Abuza, “Tentacles of Terror,” February 5, 2003 draft, p. 84.
86 “Thailand ‘The Next Battleground,” The Australian. December 1, 2004.

---

CRS-26
support of Thaksin, could represent a tipping point for the general public of the south
to support the movement.
Thai authorities have reluctantly adjusted their position on the threat of domestic
Islamic extremism, possibly with financial and operational ties to international
terrorist groups. Initially, government spokesmen insisted that most of the attacks
were the work of local criminal gangs. After the October 25 incident, Thaksin said
that the militants were local but could be getting assistance from extremists abroad
through “personal contacts,” distinct from an organized transnational network.87
Bangkok’s resistance to admitting JI presence in Thailand, probably stemming from
fears of hurting its large tourism industry, contrasts with its cooperation in cracking
down on Al Qaeda networks.
Criticism of Thaksin’s Approach. The government’s handling of the
violence, particularly the response to the detainee deaths, has been widely criticized
as ineffective and inflammatory. Thaksin backtracked on his initial defense of the
security force’s actions on October 25 and his accusation that many of the deaths
were a result of Ramadan fasting, acknowledging the military’s mistakes and
expressing regret at the loss of life. However, he did not commit to changing his
approach to the south; the military also said they intended to continue their policy of
using force. Parties outside of the Administration have expressed concern about the
events. The royal family, which commands strong loyalty from the Thai public, has
taken the unusual step of publicly intervening. In a move that may have forced
Thaksin to soften his statements, King Bhumibol Adulyadej encouraged him to take
a more measured approach. Dissent has emerged from within the elite as well: a
former prime minister and ex-Army chief have criticized the use of force and called
for campaign to restore peace in south,88 and a senior education official has urged the
creation of a new Ministry of Islamic Affairs to address the problem.89
Tension in Regional Relations. Thailand’s neighbors also expressed alarm
at the brewing insurgency, breaking the ASEAN rule of broaching internal affairs at
the November 2004 ASEAN summit in Laos. Although Thaksin resisted attempts
to add the discussion to the official agenda, Indonesia and Malaysian leaders met
with him on the sidelines to convey their concern. Australian Foreign Minister
Alexander Downer has noted the mishandling and pointed out the potential for JI to
exploit local grievances.90 The U.S. State Department also has acknowledged its
concern and intent to monitor the situation closely.91
The recent violence has both spurred cooperation and raised tension between
Thailand and Malaysia. Many of the Muslim Thais are ethnically Malay and speak
Yawi, a Malay dialect. The Malaysian public has grown increasingly angry at the
87 “Killings in Songkhla Raise Fears Violence is Spreading,” The Nation (Bangkok).
November 17, 2004.
88 “Anand, Surayud Urge Peaceful Resolution,” The Nation (Bangkok). November 16, 2004.
89 “Defusing the South,” The Nation (Bangkok). November 15, 2004.
90 “Tackling the Thai Terror Threat,” Asian Wall Street Journal. November 30, 2004.
91 State Department Press Releases and Documents, October 29, 2004.

---

CRS-27
perceived violence against Muslims in Thailand, prompting Malaysian Prime
Minister Abdullah Badawi to offer temporary refuge to Thais following the April 28
attack.92 Other prominent public figures in Malaysia have criticized Thailand’s
handling of the situation: following the October crackdown, former Malaysian Prime
Minister Mahathir Mohamed suggested that Bangkok should grant autonomy to the
southern provinces, and former Deputy Prime Minister Anwar Ibrahim called the
Thai security forces “extremely irresponsible.” However, Malaysia has pledged more
troops and equipment to increase border security, conducted joint border patrols with
Thai counterparts, and agreed to terminate the joint citizenship privileges that some
believe have facilitated the passage of terrorists across the shared border.
Thailand as a Convenient Base. In addition to indigenous violence,
confessions of detained Al Qaeda and JI suspects indicate that the groups have used
Thailand as a base for holding meetings, setting up escape routes, acquiring arms,
and laundering money. In January 2002, Hambali is reported to have convened a
meeting of JI’s operatives in southern Thailand at which the group agreed to attack
“softer” targets. A number of Al Qaeda and JI figures, including convicted World
Trade Center bomber Ramzi Yousef, have taken advantage of lax border controls and
tourist-friendly visa requirements to flee to Thailand to escape arrest in other
Southeast Asian countries.93
Additionally, Al Qaeda and JI members reportedly have purchased weapons on
Thailand’s large underground market in arms. Fears that radioactive contraband has
entered the Thai black market were heightened in June 2003, when Thai and U.S.
agents worked together to arrest a Thai citizen for trying to sell 30kg of cesium-137,
a substance used for medical purposes that could be attached to conventional
explosives for use in a “dirty bomb.” Reportedly, the arrested individual confessed
to smuggling the cesium into Thailand from Laos.94
A New Front in the War on Terror? Some observers have speculated that
if such violence continues, southern Thailand may become another front on the U.S.-
led war on terrorism in Southeast Asia. Thailand and the United States have close
anti-terrorism cooperation, institutionalized in the joint Counter Terrorism
Intelligence Center (CTIC), which was established in early 2001 to provide better
coordination among Thailand’s three main security agencies. The U.S. Central
Intelligence Agency reportedly shares facilities and information daily in one of the
closest bilateral intelligence relationships in the region. The CIA reportedly has
assigned approximately 20 agents to the CTIC and in 2002 provided between $10
million and $15 million to the center. Plans reportedly are in place to open a new
diplomatic mission in the southern region which could serve as another post for U.S.
92 “Malaysian DPM in Thailand for Talks on Violence,” BBC News online. May 4, 2004.
93 Western intelligence sources reportedly estimate that Thai immigration authorities detain
on average one person a day, usually from South Asia, for traveling with forged documents.
“Canada Helps Thais Combat Terror,” Far Eastern Economic Review. September 19, 2002.
94 Shawn W. Crispin and Gary Fields, “U.S.-Thai Seizure Triggers Fears of ‘Dirty Bombs’,”
Wall Street Journal. June 18, 2003.

---

CRS-28
agents to gather intelligence.95 Acting on CIA intelligence, the CTIC took the lead
in capturing Hambali and also has captured a number of other suspected JI
operatives.96 President Bush designated Thailand as a major non-NATO ally97 in
2003 in recognition of its support of the war against terrorism.
Malaysia
As mentioned above, for a period in the late 1990s, Malaysia was the locus of
JI’s and Al Qaeda activity. In 1999 and 2000, several Al Qaeda operatives involved
in the September 11 and the USS Cole attacks used Kuala Lumpur as a meeting and
staging ground. According to the confessions of one captured Al Qaeda leader,
Malaysia was viewed as an ideal location for transiting and meeting because it
allowed visa-free entry to citizens of most Gulf states, including Saudi Arabia.98
Malaysia’s former Prime Minister Mahathir Mohammed, a longstanding
promoter of non-violent Muslim causes, openly criticized Islamic terrorists after
September 11, including Palestinian suicide bombers. In a show of appreciation for
his cooperation, Mahathir was invited to Washington, D.C., and met with President
Bush in mid-May 2002. During that visit the United States and Malaysia signed a
Memorandum of Understanding (MOU) on counter-terrorism. The text of that
document became the basis for a subsequent declaration on counter-terrorism that the
United States and ASEAN signed at the August 2002 ASEAN Regional Forum
(ARF) meeting.99
The Bush Administration also has decided to downplay U.S. human rights
concerns over Malaysia’s use of its Internal Security Act (ISA) to imprison political
opponents without trial, especially since Kuala Lumpur has employed the ISA against
suspected members of JI and the Kampulan Mujiheddin Malaysia (KMM).100
95 Shawn W. Crispin. “Strife Down South,” Far Eastern Economic Review. January 22,
2004.
96 Shawn W. Crispin and Leslie Lopez, “A Thai-CIA Antiterrorism Team,” Wall Street
Journal. October 1, 2003.
97 Under section 517 of the Foreign Assistance Act of 1961, the President can designate a
non-North Atlantic Treaty Organization state as a major ally for the purposes of the Foreign
Assistance Act and the Arms Export Control Act. The designation allows states more access
to U.S. foreign aid and military assistance, including weapons purchases and development.
98 The 9/11 Commission Report, p. 158.
99 U.S. Embassy, Malaysia, Speech by U.S. Ambassador Marie T. Huhta, Rotary
International Dinner Forum, Kuala Lumpur, Malaysia February 22, 2003.
[http://usembassymalaysia.org.my/amsp0222.html].
100 The KMM is a small, militant group calling for the overthrow of the Malaysian
government and the creation of a pan-Islamic state encompassing Malaysia, Indonesia, and
the southern Philippines. Founded in 1995, the group is estimated by Malaysian authorities
to have fewer than 100 members. According to Singaporean and Malaysian authorities, the
KMM has close links to JI and radical Islamist groups in the Malukus and the Philippines.
U.S. State Department, Patterns of Global Terrorism 2001, p. 123-24,
(continued...)

---

CRS-29
Mahathir’s successful visit to Washington, DC, in May 2002 symbolized the
fundamental change in the U.S. posture toward him since the September 11 attack.
However, Mahathir criticized the U.S. attack on Iraq and new U.S. visa restrictions
on Malaysians seeking to enter the United States.
Shortly after taking office in the fall of 2003, Malaysia’s new Prime Minister
Abdullah Ahmad Badawi pledged to continue Malaysian support for the war against
terror.101 In March 2004, Badawi’s National Front Coalition won a significant victory
over Malaysian Islamists who favor an extreme form of Islam. During the February
Counterterrorism conference in Bali, it was reported that Attorney General Ashcroft
complimented Malaysia for its anti-terrorism efforts and for progress made on a
Mutual Legal Assistance Treaty (MLAT).102 In a recent statement before the
Organization of Islamic Conference (OIC) Prime Minister Abdullah Badawi
reportedly called on the United States to change its foreign policy to counter the
perception, held by many in the Islamic world, that it is anti-Islamic.103
Mainstream Islam in Malaysia appears to have reasserted its moderate character.
Though the late 1990s saw a significant electoral swing toward the radical Islamist
party, Parti Islam se-Malaysia (PAS), parliamentary elections in March 2004
significantly rolled back PAS’ earlier gains. Badawi’s Barisan National (BN) party
polled 64.4% of the vote and took 196 out of 219 seats in parliament.104 PAS lost
control of Terengganu and only just held on to Kelantan leaving it in control of only
one of 13 state governments with BN controlling the rest. PAS seats in parliament
fell from 26 seats to seven. The election result is interpreted as a sign that Malaysians
are comfortable with Badawi. It is also seen as demonstrating the limited appeal of
radical Islamic policies espoused by PAS.105
Recent Developments. Malaysia’s Prime Minister Datuk Seri Abdullah
Badawi reportedly sought to strengthen bilateral ties with the United States during
100 (...continued)
[http://www.state.gov/s/ct/rls/pgtrpt/]. The KMM’s links to Malaysia’s main opposition
party, Parti Islam se-Malaysia (PAS), are controversial. After the September 11, 2001
attacks, Prime Minister Mahathir explicitly linked PAS to the KMM and international
terrorist movements, and went on a political offensive against the party, which had made
gains in recent local elections. Several of the alleged KMM members arrested are allegedly
PAS members, including some senior party leaders. Abuza, “Tentacles of Terror,” February
5, 2003 draft, p. 40.
101 “Malaysia Pledges Terror Fight,” The Wall Street Journal, November 4, 2004.
102 The MLAT will establish cooperation for the prosecution of terrorist suspects in both
countries. It will also assist in the exchange of witnesses and in terrorist investigations.
“U.S. Compliments Malaysia for Role in Anti-terror Efforts,” Bernama Daily, February 5,
2004.
103 “Time For US to Change its Image,” Today, January 28, 2005.
104 Malaysia Primer, Virtual Information Center, U.S. Department of Defense, April 12,
2004.
105 “Malaysia Politics: Election Winner and Losers,” Economist Intelligence Unit, March
24, 2004.

---

CRS-30
his July 2004 meeting with President Bush in Washington.106 Although not uncritical
of the United States policies, such as the Israel/Palestinian issue, Badawi is a
moderate Islamic leader that is giving indications that Malaysia will continue to be
a valuable partner in the war against terror in Southeast Asia.107 Badawi has urged
that the war on terror take into account the root causes of terror and has warned that
if it does not “for every one we kill, five more will emerge to continue their
struggle.”108 An NGO coalition in Malaysia known as Peace Malaysia headed by the
son of former Prime Minister Mahathir Mohammad ran a series of television
advertisements in January 2005 that denounced terrorism as un-Islamic stating that
“violence dishonors faith.”109
The threat of seaborne terrorism in the region, particularly in the vital Straits of
Malacca between Malaysia and Indonesia, has received increased attention. Admiral
Thomas Fargo visited Malaysia to coordinate sharing of intelligence and to offer to
help build the capacity of Malaysia, and other regional countries, to deal with such
a threat.110 Fargo reportedly initially displeased Malaysia and other regional states
when he mentioned, in response to a question during congressional testimony, that
the United States might consider dispatching ships to patrol the Strait rather than
assist regional states in doing so.111
Singapore
Singapore has been at the forefront of anti-terrorist activity in Southeast Asia.
A terrorist attack on the city-state could jeopardize its standing as the region’s
financial and logistical hub. Singaporean officials maintain that important port
facilities and other major targets remain vulnerable. Under its Internal Security Act,
Singapore has arrested 37 Islamic militants. Of those, 13 are members of Jemaah
Islamiah (JI), a designated foreign terrorist organization with reported links to Al
Qaeda, for allegedly plotting to bomb the U.S. Embassy and other targets. Authorities
claim that many of the other suspects have links to the Philippines-based Moro
Islamic Liberation Front (MILF). In September 2004, Singapore announced that it
had extended by two years the detention of alleged terrorists. The government of
Singapore has outlined measures that it has taken to dismantle JI operations in
Singapore in a white paper entitled “The Jemaah Islamiah Arrests and the Threat of
Terrorism.”
106 See CRS Report RL32129, Malaysia: Political Transition and Implications for U.S.
Policy, by Bruce Vaughn.
107 Speech by The Honorable Abdullah Badawi, Prime Minister of Malaysia, Washington,
DC, July 19, 2004.
108 “Disquiet as Bush Dominates Agernda at Asia Pacific Sumit,” Agence France Presse,
November 21, 2004.
109 “Malaysian TV Runs Anti-terror Campaign Aimed at Muslims,” Agence France Presse,
January 2005.
110 “Seaborne Terrorism is a Serious Threat: Fargo,” Agence France Presse, June 24, 2004.
111 Barry Wain, “Strait Talk,” Far Eastern Economic Review, April 22, 2004.

---

CRS-31
Reformed Homeland Security Apparatus and Counterterror
Strategy. After 9/11, Singapore created a new body within the Prime Minister’s
office to centralize its revised security architecture: the National Security
Coordination Secretariat (NSCS) is responsible for national security planning and the
coordination of policy and intelligence. The official in charge of the NSCS reports
to the Prime Minister through the Security Policy Review Committee (SPRC), which
includes the Ministers of Defense, Home Affairs, and Foreign Affairs. In addition
to a revamped bureaucracy, Singapore has instituted a number of specific programs
to protect its homeland. Through its “Total Defense” campaign, which calls on all
Singaporeans to participate in the national defense, the government has been
psychologically preparing its public for an attack by framing the question of a
terrorist attack as “when, not if.” Singaporean officials maintain that important port
facilities and other major targets remain vulnerable and have stepped up protection
of these and other critical infrastructure. Measures include camera surveillance of
water and power facilities, enhanced security at embassies and prominent public
areas, and the deployment of armed personnel at the major petrochemical hub on
Juron Island. The regulation of people and goods across Singapore’s borders has also
been intensified through the merging of the border control functions of the customs
and immigration services. The Joint Counter Terrorism Center (JCTC) coordinates
the multiple agencies and departments of the Singaporean government that deal with
terrorism, including the intelligence agencies.
Increased Intelligence Sharing. Since 9/11, Singapore has increased
intelligence cooperation with regional countries and the United States. Singapore
officials point to the arrest in Indonesia of Mas Selamat Kastari, the alleged Jemaah
Islamiah Singapore cell leader and the arrest in Thailand of Arifin Ali, a senior
member of the same cell, as evidence of successful intelligence sharing with
counterparts in neighboring countries. Singaporean authorities have also shared
information gathered from the detainees with U.S. officials, providing detailed
insights into JI and Al Qaeda’s structure, methods, and recruiting strategies.
Bilateral and Multilateral Cooperation. Singapore has demonstrated its
commitment to fighting terrorism through a number of multilateral and bilateral
agreements. It was a founding member of the U.S.-led Proliferation Security
Initiative (PSI), a program that aims to interdict shipments of weapons of mass
destruction-related materials. It also was the first Asian country to join the Container
Security Initiative (CSI), a series of bilateral, reciprocal agreements that allow U.S.
Customs and Border Patrol officials at selected foreign ports to pre-screen
U.S.-bound containers. Singapore is party to a United Nations-administered
international code, the International Ship and Port Facility Security (ISPS) code to
the Safety of Life at Sea (SOLAS) convention, that bolsters maritime security;
Singapore was one of the first ports to reach full compliance with the required safety
measures. Singapore also signed and ratified the U.N. Convention for the
Suppression of the Financing of Terrorism and has tightened its surveillance of
financial records.
Singapore has focused particular attention on maritime security measures,
urging other littoral states in Southeast Asia to work together to protect critical
shipping lanes. In 2004, Singapore launched joint naval exercises with Australia and
trilateral coordinated patrols of the Straits of Malacca with Indonesia and Malaysia.

---

CRS-32
Many regional security experts have noted that the demonstrated threat of piracy in
the Straits is increasingly being coupled with the threat of a major act of maritime
terrorism.
Australia
Australian involvement alongside the United States in the war against terror has
been staunch, as was highlighted by President Bush in his address to the Australian
Parliament on October 22nd, 2003. In his address, the President pointedly
acknowledged the valuable contribution made by Australia’s special forces in
Afghanistan and in Iraq. Prime Minister Howard was visiting Washington on
September 11, 2001, as part of the celebration of the 50-year anniversary of the
ANZUS alliance. Shortly after the attacks of that day, in which 22 Australian lives
were lost, Australia evoked the ANZUS Treaty to come to the aid of the United
States and subsequently committed Australian military forces to fight in Afghanistan
and Iraq. Australia’s commitment to the war on terror was redoubled as a result of
the Bali bombing, which killed 89 Australians, as well as by the September 9, 2004
attack on the Australian Embassy in Jakarta. Imam Samudra stated in his confession
of his role in the Bali bombing that Australians had been targeted in the Bali attack
for their ties to the United States and for their involvement in East Timor.112
Australia helped East Timor become an independent nation through its leading role
in 1999 in the International Force East Timor (INTERFET) and in the follow-on U.N.
Transitional Administration East Timor (UNTAET).
Whereas Southeast Asia has been described as the “second front” in the war on
terror by senior U.S. officials, it is Australia’s area of most immediate strategic
interest beyond its borders. Australia’s approach to its war on terror is outlined in a
white paper Transnational Terrorism: The Threat to Australia, prepared by the
Department of Foreign Affairs and Trade. JI’s mantiqi 4 was operating in Australia
for years before the Bali bombing of October 2002. There are approximately 340,000
Muslims in Australia constituting approximately 4% of the population.113 Australia
has been working closely with Indonesian and other regional authorities to combat
terrorism. Australian Federal Police officers assisted Indonesia in finding suspects
and tracking the money trail used to finance the Bali attack.114 Australian Federal
Police also assisted the investigation into the bombing of the Indonesian Peoples
Representative Council. In 2002, the two countries negotiated a MOU on Terrorism,
in which they pledged to cooperate on information and intelligence sharing, law
enforcement, money laundering and terrorist financing, cooperation on border control
systems, and aviation security. Australia also announced a $6.46 million commitment
to assist Indonesia to achieve these aims.115 Australia has established an Ambassador
for Counter Terrorism and has concluded counterterror MOUs with several countries.
112 “JI Groups in Australia Watched,” The Daily Telegraph, February 11, 2003.
113 Richard Halloran, “The Rising East,” Honolulu Adviser, November 14, 2004.
114 Daniel Clary, “Bali Trials List Might Widen,” The West Australian, May 15, 2003.
115 “Australia-Indonesia Joint Ministerial Statement,” Jakarta, Indonesia, March 11, 2003.

---

CRS-33
Australia is expanding its counterterrorism cooperation with Indonesia and
regional states while it also seeks to develop its own capabilities. One outcome of the
February Bali Regional Ministerial Meeting on Counterterrorism was a $28.2 million
commitment by Australia to an Indonesian Center for Law Enforcement Cooperation
in Jakarta. This was reportedly increased to $36.8 million.116 The center is to support
regional capacity building and also have an operational mandate to provide support
in response to specific terrorist threats or actual attacks.117 Australia held a
nationwide counterterror exercise in March 2004 that focused on preventing the use
of ships as weapons of mass destruction in an attack on Darwin. U.S.-owned
Connoco Philipps is currently developing a large liquid natural gas facility in
Darwin.118 There are fears in Australia that Australia’s commitment to the U.S.-led
war in Iraq has made Australia more of a target for Islamic extremists. It was
reported that the CIA asked Hambali 200 questions on behalf of the Australian
government. As a result of this line of questioning it is reported that Hambali had
planned on attacking Australia but was unable to assemble an effective team to carry
out the attack.119
It is now thought by leading analysts that JI was more active in Australia than
previously thought. Twenty individuals in Australia are thought to have received
terrorist training and another four await trial on terrorism charges.120 It has been
asserted that JI sent twin brothers Abdul Raham Ayub and Abdul Rahim, both of
whom had close connections with Al Qaeda, to Australia prior to the Bali bombing.
Rahim is thought to have been the JI leader in Australia. Another JI member in
Australia, Wandi, is thought to have had ties to Hambali and to have laundered funds
for JI. It is thought that Australia has been the source of much monetary support for
JI including one $1.5 million donation to the Philippines which was reportedly
detected by Philippines authorities. It is also thought that other funds went to JI in
Indonesia. An Australian convert to JI who reportedly met with Hambali, Jack
Roche, reportedly is serving a nine-year sentence in Australia after pleading guilty
to conspiring to bomb the Israeli embassy in Canberra.121 ASIO head Dennis
Richardson has also been quoted as saying that “...it is likely that Brigitte [a French
al-Qaeda suspect] and his associates would have carried out a terrorist attack in
Australia” had they not been thwarted by French-Australian co-operation.122
116 J. Frydenberg, “How to Step up the War on Terror in Our Backyard,” The Age, December
17, 2004.
117 The Hon. Alexander Downer, Minister for Foreign Affairs, “Indonesia Centre for Law
Enforcement Cooperation,” Department of Foreign Affairs and Trade, Australia, February
5, 2004.
118 “Tightened Security in Darwin,” Far Eastern Economic Review, April 1, 2004.
119 “Hambali’s Plan to Attack Australia Misfired,” Jakarta Post, January 24, 2004.
120 Tom Allard, “Suspected Violent Extremists on Rise, ASIO Warns,” The Sydney Morning
Herald, November 6, 2004.
121 Mark Forbes, “Al-Qaeda, JI Links in Australia,” The Age, November 1, 2004. See also
Sally Neighbour, In the Shadow of Swords, (Sydney: Harper Collins, 2004).
122 Kate Gauntlett, “WE Bungled Terrorist Offer,” The West Australian, November 6, 2004.

---

CRS-34
The reelection of both President Bush and Prime Minister Howard in 2004, who
have established what is perceived as a close relationship, will likely help facilitate
close coordination in the two states’ fight against terrorism. Within this context, the
United States will likely continue to look to Australia to offer assistance particularly
in Southeast Asia and the Southwest Pacific. Australia’s contribution to regional
security and counter terror initiatives and focus on Indonesia will be of particular
assistance.123 Australia has reportedly committed to establishing six additional
counter terror teams within the Australian Federal Police that will have the capability
to operate in the region. Australia also held a meeting of regional special forces to
discuss counter terror measures.124 The United States released Australian Mamdouh
Habib to Australia after being held for three years in Guantanamo Bay for suspected
terrorism. Defense Secretary Rumsfeld believes he is still a security threat. The
Australian Government believes Habib had ties to Al Qaeda and has not ruled out
charging Habib.125 Australian David Hicks who is thought to have fought for the
Taliban and Al Qaeda has also been held in Guantanamo. He is scheduled to stand
trial before a military tribunal on March 15, 2005.126 It is also thought that Australia
has not signed the ASEAN Treaty on Amity and Cooperation to retain the option to
launch a preemptive strike against terrorist in the region.127
Cambodia and Burma: New Countries of Convenience?
Two of the hallmarks of Al Qaeda and JI have been their mobility and
adaptability. The heightened scrutiny placed on JI operations in the major countries
in Southeast Asia has led to concerns that the terrorist network would establish or
step up operations in other countries that on the surface would appear to be unlikely
locales for Islamic terrorism to take root. During Indonesian authorities’
interrogation of Omar al Faruq, the Al Qaeda leader reportedly admitted that JI had
been attempting to forge ties with radical Muslims in Burma.128
In Cambodia in May and June 2003, four men — one Cambodian Muslim, two
Thai Muslims, and an Egyptian — were arrested in Phnom Penh for belonging to JI
and plotting to carry out terrorist attacks in Cambodia. The three non-Cambodians
were teachers at a Saudi-funded Islamic school that Cambodian authorities
subsequently shut down, expelling fifty foreign employees. The school was run by
a charitable foundation that is suspected of laundering money for JI and Al Qaeda.
123 Geoffrey Barker, “Howard and Bush Know the Appeal of Simple Nostrums,” Financial
Review, November 6, 2004.
124 J. Frydenberg, “How to Step up the War on Terror in Our Backyard,” The Age, December
17, 2004.
125 Cynthia Banham, Marian Wilkinson and G. Noonan, “Habib Comes Home to
Surveillance and a Hostile PM,” Sydney Morning Herald, January 13, 2005.
126 P. Debelle, “Trial Ruling Raises Hopes as Hicks Moved,” Sydney Morning Herald,
November 10, 2004.
127 “Our View ASEAN Treaty an Acid Test for Australia,” New Zealand Herald, November
30, 2004.
128 Abuza, “Terrorism in Southeast Asia,” p. 15.

---

CRS-35
The information leading to the arrests reportedly came from a tip provided by the
United States following the interrogation of a Singaporean JI operative who is said
to have met with and sent funds to the suspects in Cambodia.129 Since the withdrawal
of Vietnamese troops in the early 1990s, Cambodia’s Cham ethnic group, most of
whom are moderate Muslims, has seen a rise in Wahhabi influence and funding from
Wahhabi schools in the Middle East. The Cham make up less than five percent of
Cambodia’s 12.5 million population, which is predominantly Buddhist.
The Burmese government claims that there are terrorist elements among
Burmese Muslims, linked to an al Qaeda network in neighboring Bangladesh.
However, the United States and many other governments are unlikely to view these
claims as credible because of the evidence that the Burmese government is a major
violator of human rights, including the rights of Muslims.
Options and Implications for U.S. Policy
Strategies for Combating Terrorism in Southeast Asia
The 9/11 Commission recommends conceptualizing the battle against Islamist
terrorism as a two-pronged campaign on the one hand aimed at disrupting the
leadership of Al Qaeda, Jemaah Islamiyah, and like-minded terrorist networks and
on the other hand competing against the rise of radical ideologies within the Islamic
world that inspire terrorism.130 To date, U.S. policy in Southeast Asia has
emphasized the first goal, which is more immediate and requires an emphasis on the
policy tools necessary to kill and capture specific individuals, locate and destroy
terrorist training facilities, and identify terrorist financing networks.
The second goal is perhaps less urgent in the immediate term, but more
important in the longer term. It also is more complex, for essentially it aims at
reducing the appeal of violent Islamism by strengthening national governments’
ability to provide their Muslim citizens with an attractive alternative. Although
Southeast Asian societies and governments in general are more tolerant,
representative, and responsive than those in the Middle East and South Asia, Islamist
terrorist groups have been able to exploit the sense of alienation produced in part by
the corruption and breakdown of institutional authority in Indonesia and by the
marginalization of minority Muslim groups in the southern Philippines and southern
Thailand.
Additionally, to date the U.S. approach to fighting terrorism in Southeast Asia
primarily has been bilateral — rather than multilateral — in nature, and generally has
been limited to the law enforcement — rather than the military — realm. In the near
term, barring another major terrorist attack, it is difficult to foresee these features of
129 Luke Hunt, “JI arrests throws spotlight on Cambodia’s radical Muslims,” Agence France
Presse, May 28, 2003; Shawn Crispin, “Targets of a New Anti-Terror War,” Far Eastern
Economic Review, July 10, 2003; Abuza, “Terrorism in Southeast Asia,” p. 16.
130 The 9/11 Commission Report, p. 361-365.

---

CRS-36
U.S. strategy changing since they are based upon features of international relations
in Southeast Asia: relatively weak multilateral institutions, the poor history of
multilateral cooperation, and the wariness on the part of most regional governments
of being perceived as working too closely with the United States. Rectifying these
deficiencies could be elements of the long-term goal of competing against terrorist
ideologies.
Decapitation. Thus far, the strategy of arresting Jemaah Islamiyah’s
leadership is thought to have crippled JI’s capabilities significantly. If the
International Crisis Group’s observation of factions within JI is correct, it may mean
that a continued push to arrest the network’s leadership could dramatically reduce
JI’s ability to threaten Western targets directly. The arrests likely would
disproportionately target JI’s more radical leaders, perhaps giving more prominence
to the “bureaucrats” who have a longer time horizon and reportedly believe that
violence against Westerners undermines the ultimate objective of establishing sharia
in the region. Additionally, it appears that middle and lower-level JI functionaries’
level of commitment may not be as fanatical as commonly thought. Some plotters
reportedly have had second thoughts about participating in particular operations,
indicating that close intelligence sharing could help governments identify members
who could be induced to desert.131
Military Options. Yet, the apparent fact that JI remains potent despite the
elimination of most of its leadership indicates that a decapitation strategy alone is
insufficient. There are reports that some U.S. military officials have expressed a
desire to conduct surveillance and/or act upon surgical strike plans, including covert
actions, targeting terrorist training camps in Southeast Asia.132 Attacking camps
operated by JI and/or the MILF in Mindanao may be particularly attractive, as
Mindanao may be performing a crucial role as a regrouping and training area for JI
operatives.
However, any gains from eliminating JI camps would have to be balanced with
the likely longer-term risks. The two countries with suspected JI camps, Indonesia
and the Philippines, are particularly sensitive to the presence of U.S. troops operating
in their territory, as evidenced by Jakarta’s reluctance to allow U.S. pilots to conduct
aerial training exercises in Indonesian airspace while U.S. aircraft carriers perform
relief and reconstruction work in Aceh following the December 2004 tsunami. Thus,
if covert military actions were carried out by U.S. soldiers and were discovered, the
revelations would be sure to inflame anti-American opinion, regardless of whether
they were sanctioned by the host government. The likely backlash would then make
it much more difficult for Southeast Asian national and local leaders to support these
and other U.S. anti-terrorism actions. Furthermore, even if camps are successfully
131 Rohan Guanaratna, “Al-Qaeda’s Operational Ties with Allied Groups,” Jane’s
Intelligence Review, February 1, 2003.
132 Barton Gellman, Washington Post, “Secret Unit Expands Rumsfeld’s Domain,” January
23, 2005. Additionally, in the days after the September 11 attacks, at least one senior
Pentagon official floated the idea of taking military action against terrorist targets in
Southeast Asia as a “surprise” alternative to attacking Afghanistan. The 9/11 Commission
Report, p. 559, note 75; Douglas Feith, “A War Plan That Cast A Wide Net,” Washington
Post, August 7, 2004.

---

CRS-37
eliminated, it is likely that they could be rebuilt and/or relocated in relatively short
order.
In weighing military options, U.S. policymakers would have to balance the
advantages and disadvantages of conducting the operations with U.S. troops or rely
on local forces, of carrying out operations overtly or covertly, and of notifying the
local government of such actions beforehand or conducting them without prior
notification. Actions taken without local approval could well be regarded by many
in the region as an act of war.
Short- and Long-Term Capacity-Building Strategies. Other
counterterrorism strategies include placing a greater emphasis on attacking the
institutions that support terrorism, and building up regional governments’
institutional capacities for combating terrorist groups and for reducing the sense of
alienation among Muslim citizens.133 Options include:
! Placing priority on discovering and destroying terrorist training
centers, which have proven extremely important to JI and the MILF,
in particular;134
! Increasing the U.S. Pacific Command’s use of international
conferences and exercises aimed at combating terrorism and piracy,
such as through PACOM’s proposed regional maritime security
initiative;135
! Strengthening the capacities of local government’s judicial systems,
through training and perhaps funding, in an effort to reduce the
corruption and politicization of the judicial process;
! Working with Indonesia, the Philippines, and other countries to
better manage communal tensions and identify religious flash points
before they erupt. Sectarian violence has proven to be fertile ground
for JI and other terrorist groups to recruit and raise funds;136
! Building up state-run schools, so that Muslims are less likely to send
their children to radical madrassas where extremist brands of Islam
are propagated. The 9/11 Commission recommends creating a new
multilateral “International Youth Opportunity Fund” that would seek
to improve primary and secondary education in Muslim
133 Abuza, “Funding Terrorism in Southeast Asia,” p. 10-11.
134 Jones, “Indonesia Backgrounder,” p. ii.
135 United States Pacific Command Joint Interagency Coordination Group for Combating
Terrorism, “Strategy for Regional Maritime Security Initiative,” Version 1.0, November,
2004.
136 Sidney Jones, “Terrorism In Southeast Asia, More Than Just JI,” Asian Wall Street
Journal, July 29, 2004.

---

CRS-38
communities.137 The Bush Administration moved in this direction
in October 2003, when it launched a $157 million program to help
improve the quality of Indonesian schools. The initiative has been
criticized on the grounds that unlike in Pakistan and the Middle East,
where madrassas often are the best opportunity for an education, in
Southeast Asia, many JI members hail from the middle class, and
most recruitment appears to occur in mosques or on university
campuses;138
! Expanding educational exchanges, similar to the Fulbright program,
so that future elites have thorough exposure to the United States;
! Strengthening civil society and the democratic process;
! Pursuing policies, such as negotiating free trade agreements and
promoting the multilateral Doha Development Agenda trade talks,
that encourage economic development;139
! Increasing regional cooperation on a multilateral and bilateral basis
with key governmental institutions involved with the war against
terror;
! Providing assistance and training to developing regional counter
terrorism centers;
! Assisting in developing frameworks such as harmonized extradition
agreements and evidentiary standards to more effectively prosecute
terrorists and facilitate investigations and data sharing with regional
partners;
! Building up the capabilities of countries’ coast guards and navies to
better combat piracy, gun running, and other types of smuggling,
particularly in the Straits of Malacca and the waters between
Sulawesi and the southern Philippines.140 USPACOM’s proposed
regional maritime security initiative envisages this type of
cooperation. The U.S. military could play a role here, perhaps in
coordinating with Japan, the Coast Guard of which has been
conducting bilateral exercises with selected Southeast Asian
countries. Two difficulties are that Malaysia only recently
established a Coast Guard, and Indonesia has nearly a dozen
137 The 9/11 Commission Report, p. 378.
138 Jones, “Terrorism In Southeast Asia, More Than Just JI.”
139 The 9/11 Commission Report, p. 378-79; Robert Zoellick, “Countering Terror With
Trade,” The Washington Post, September 20, 2001.
140 The Stanley Foundation, “US Security Relations With Southeast Asia: A Dual
Challenge. Southeast Asia in the Twenty-First Century: Issues and Options for US Policy,”
Policy Bulletin, March 2004, p.1-2.

---

CRS-39
agencies that claim responsibility for guarding Indonesian waters, in
which about one-quarter of the world’s piracy incidents occurred in
2003;
! The 9/11 Commission argues that tracking terrorism financing “must
remain front and center in U.S. counterterrorism efforts.”
Notwithstanding increased police cooperation, most Southeast Asian
countries do not appear to have made commensurate efforts to
locate, freeze, and at a minimum disrupt the flow of the assets of
Islamic terrorist groups. As of December 2003, no terrorist funds
had been seized in the region, despite assessments by U.S. officials
that Al Qaeda has increasingly relied on Southeast Asia to move its
money and hide its assets because authorities in the Middle East
have heightened scrutiny of the network’s operations. Indonesia, the
Philippines, and Burma remain on the Organization for Economic
Cooperation and Development’s list of “Non-Cooperative
Countries” in the fight against money laundering. Although shutting
down informal financing mechanisms such as cash donations and the
informal hawala system of transferring money would be next to
impossible, feasible actions include shutting down charities linked
to terrorist groups, monitoring front companies and legitimate
businesses linked to terrorist groups, and establishing a regional
clearing house for intelligence sharing.141 Concurrently, monitoring
of terrorist money can be used as an important intelligence tool to
better understand how terrorist networks operate.142
! As part of ongoing bilateral cooperation, U.S. officials could
emphasize increased regulation, transparency, and enforcement in
individual countries’ financial sectors.
Public Diplomacy. Ultimately, convincing regional governments to increase
anti-terrorism cooperation will depend upon reducing the political costs of doing so.
Muslim Southeast Asia currently is undergoing something of a spiritual awakening,
with Islamic consciousness rising and influencing the opinion of moderate Muslims.
Polls indicate that U.S. actions in the Middle East, particularly in Israel and Iraq,
have led to a steep rise in anti-Americanism making overt cooperation with U.S.
counterterrorism operations more difficult, as increasing numbers of Muslims in
Southeast Asia see U.S. policy as anti-Muslim. Singapore’s Prime Minister Goh
Chok Tong, for instance, has argued that “a more balanced and nuanced approach [by
the United States] towards the Israeli-Palestinian conflict ... must become a central
pillar to the war on terrorism” in order to maintain credibility in Southeast Asia.143
141 Abuza, “Funding Terrorism in Southeast Asia,” p. 56-68.
142 The 9/11 Commission Report, p. 382.
143 Muray Hiebert and Barry Wain, “Same Planet, Different World,” Far Eastern Economic
Review, June 17, 2004.

---

CRS-40
Additionally, there appears to be a perception among some Southeast Asians
that the United States has relied too heavily on “hard” (military) power to combat
terrorism, not only in Afghanistan and Iraq, but also in Southeast Asia. Malaysian
Defense Minister Najib Razak, for instance, has stated that “terrorism cannot be
bombed into submission ... the underlying legitimate grievances that allow for such
extremists to gain support” must be addressed. He advocates “a judicious mix of
hard and soft force” to prevail against terrorism. Some regional academics also have
concluded that America’s “highly militarized approach” to the war against terror in
Southeast Asia may be inadequate to neutralize the threat and may “even backfire.”
“The embers of radical Islamist terrorism can only be doused by the adoption of a
comprehensive approach that addresses a host of real or perceived social, economic,
political, and ultimately ideological challenges.”144 Secretary of Defense Rumsfeld
reportedly cautioned regional leaders against making a “separate peace” with
terrorists and equated such action with the appeasement of Adolf Hitler.145 While
these perceptions of an overly militaristic U.S. response in Southeast Asia may be
overblown — particularly by being colored by U.S. politics in the Middle East —
they may indicate a disconnect between the United States approach to the war on
terror and its regional friends and allies. Such a division has the potential to limit the
degree to which regional states will cooperate with the United States in the war on
terror.
To counter these sentiments, the United States could expand its public
diplomacy programs in Southeast Asia to at least provide an explanation for U.S.
actions in the region and other parts of the world. Many of these programs were
reduced significantly in the 1990s, after the end of the Cold War. The 9/11
Commission specifically recommends increasing funding to the Broadcasting Board
of Governors, the independent but government-financed agency that is responsible
for all U.S. government and government sponsored, non-military, international
broadcasting, including the Voice of America (VOA).146 Applied to Southeast Asia,
such as step could include expanding VOA’s existing Indonesian language
broadcasts and adding broadcasts in Javanese and other Indonesian dialects, as well
as in Malay and Tagalog.
Multilateral Efforts. Finally, the ease with which Al Qaeda, JI and other
groups have transferred personnel, money, weapons, and information across borders
indicates that thwarting terrorist activities will require a coordinated, international
response in a region where multinational institutions — including ASEAN — and
cooperation are weak. Greater border controls in particular can help disrupt
terrorists’ travel activities. The importance of multinational intelligence-sharing and
extradition agreements is underscored by the apparent fact that many captured Al
Qaeda and JI members have provided authorities with useful information that has led
to further arrests and the discovery of new plots.
144 See Seng Tan and Kumar Ramakrishna, “Interstate and Intrastate Dynamics in Southeast
Asia’s War on Terror,” SAIS Review, Spring, 2004.
145 Murray Hiebert and Barry Wain, “Same Planet, Different World,” Far Eastern Economic
Review, June 17, 2004.
146 The 9/11 Commission Report, p. 375-77.

---

CRS-41
A number of Southeast Asian states have increased anti-terrorist cooperation,
both with the United States and with each other. In particular, there appears to be a
dramatic improvement in the level of intelligence sharing among national police
forces. Cooperation among Singapore, Malaysia, the Philippines, and the United
States appears to have been particularly effective, leading to the arrests of dozens of
suspected JI members, including several top leaders. Another sign of increased
attention given to terrorism occurred in July 2003, when the Southeast Asia Regional
Center for Counter-Terrorism opened in Kuala Lumpur. The center houses
researchers and hosts training sessions for regional officials. In August 2002, the
United States and all ten members of ASEAN signed an agreement to cooperate in
counterterrorism activities. The agreement calls for signatories to freeze terrorist
groups’ assets, improve intelligence sharing, and improve border controls.147
Delegates attended the second ASEAN Regional Forum Inter-sessional meeting on
Counterterrorism and Transnational Crime in March 2004 where they discussed
transport systems as potential terrorist weapons. The meeting was co-chaired by the
Philippines and Russia.148 The ASEAN Regional Forum has begun to study some
elements of USPACOM’s proposed regional maritime security initiative, particularly
strengthening transport security, and conducting joint navy and coast guard
simulations and exercises.149
Indonesia
The ongoing debate over the relative emphasis that strategic interests and human
rights concerns should play in the bilateral relationship with Indonesia will likely
continue in United States policy circles during deliberations on foreign assistance for
Indonesia. On one side of the debate are those who argue that the United States must
develop access to Indonesia, through its elites, to be able to influence the nation
across a range of issues, including strategic considerations, counterterrorism, and
human rights. On the other side of the debate are those who argue that such an
approach has shown few results and that the United States needs to send a clear
signal to Indonesia that Jakarta must improve its human rights performance to be able
to access the full range of benefits that can be derived from the bilateral relationship
with the United States. The latter approach has been embodied, since 1991, in the
so-called “Leahy Amendment” to the annual foreign operations appropriations bill
which has banned aid to the TNI until Indonesia fulfilled several conditions relating
to accountability for these human rights abuses. (See “Role of Congress/Legislation”
below for further details.) Set against this backdrop is the need for bilateral
cooperation in the war against terror.
United States-Indonesian anti-terrorism cooperation improved significantly after
the Bali bombing. Fears that the United States’ war against Iraq would inflame the
country were proven to be largely unjustified, though U.S. policy toward Iraq and
147 United States of America-ASEAN Joint Declaration for Cooperation to Combat
International Terrorism, August 1, 2002.
148 “Terrorism on Wheels, On Wings,” Manila Standard, March 31, 2004.
149 BBC Monitoring Asia Pacific, “ASEAN Forum Members Affirm Need to Boost
Transport Security Against Terrorism,” July 2, 2004.

---

CRS-42
Israel are the two key issues contributing to the declining popularity of the United
States in Indonesia. Though the August 5, 2003 bombing at the Marriott Hotel in
Jakarta demonstrated that terrorists are still operating in Indonesia, Indonesian police
efforts, including widespread arrests of suspected JI members, have set back the
radical Islamic agenda in Indonesia and helped moderate Islamic groups improve
their position. The revelation that Indonesian police had obtained information
indicating that a terrorist attack could happen in the neighborhood of the Marriott
Hotel attack, but did not inform the U.S. Embassy or Marriott, points to limits to
Indonesia’s ability to cooperate in counterterror measures, as does the decision to
release Baasyir.150 About 150 people, mostly Indonesians but including two
Americans, were injured in the Marriott Hotel attack. One of the key reasons for
Indonesia’s more aggressive stance against JI is the growing post-Bali perception that
the network is a threat not just to Western interests in Indonesia but to the Indonesian
government and society as well.
Even in the aftermath of the Bali bombing, however, the potential for a
nationalist backlash against working too closely with the United States exists,
perhaps raising the need for a heavy reliance upon relatively unobtrusive forms of
counterterrorism cooperation. Counterterror cooperation options include intelligence
sharing, cooperation in police investigations, training in border and immigration
controls, and securing Jakarta’s approval for the dispatch of covert U.S. agents to
Indonesian soil. The latter option, however, if discovered, runs the risk of further
inflaming anti-American passions. The TNI generally has more effective domestic
intelligence capabilities than the national police, which until January 2001 were part
of the military establishment. The Bush Administration also has a desire to
reestablish military-to-military ties with Indonesia. The central role that the military
plays in Indonesia highlights the importance of any relationship with the military.
To this end the United States has established a counterterrorism fellowship program
with Indonesia. On the other hand, the TNI is widely viewed as among the most
egregious actors in Indonesian rights abuses.
Although there has been much improvement, there are several other reasons why
counterterrorism cooperation may have limitations:
! The perception that the trials of military figures accused of human
rights abuses in East Timor in 1999 were inadequate
! Fear that further human rights abuses will take place in the current
suppression of rebels in Aceh
! Concern that the military is not cooperating in the investigation of
the murder of two American citizens in Papua
! Lingering concern that the Indonesian government is not doing
enough to fight the war against terror
! Although the police have increased cooperation on counterterrorism
it is not clear that the military will to the same extent. The resources
of the military far outweigh those of the police in Indonesia.
150 “Terror in Indonesia,” The Washington Post, August 7, 2003.

---

CRS-43
One policy issue that Congress may wish to consider is how best to support
moderate Islamic elements in Indonesia in what is developing into a struggle with
more conservative, and in some cases extremist, forms of Islam in Indonesia. It
would not be in the United States’ interests if a more radical form of Islam came to
dominate Indonesia. In such a situation, extremist groups would have more ability
to operate and would likely have a larger pool of disaffected Indonesians from which
to draw their recruits. The April 5, 2004 parliamentary elections did not lead to a
significant rise in popularity of Islamic parties. Some observers suggest that the
United States should step up its assistance to democratization in Indonesia. From
this perspective, the sooner Indonesia establishes political stability and develops
deeper democratic institutions, the sooner it will be able not only to increase
cooperation against terrorism but also rein in the Indonesian military and gain greater
accountability from it.
The Philippines
The delicate internal political situations in the Southeast Asian countries
affected by Islamic radicalism and terrorism impose serious limitations on U.S.
freedom of action. This currently is highlighted by the difficulties in Philippine-U.S.
negotiations over developing a second U.S. program of military support for Filipino
military operations against Abu Sayyaf. U.S. interests have been threatened by MILF
training of JI personnel and the flow of terrorists and terrorist weapons between
Mindanao and the Indonesia island of Sulawezi.
During the Balikatan operation of 2002, the Bush Administration and the
Philippine government sought to avoid a U.S. confrontation with the MILF.
However, mounting evidence of MILF support for JI reportedly led the Bush
Administration in late 2002 to consider placing the MILF on the U.S. official list of
foreign terrorist organizations. President Arroyo reportedly convinced U.S. officials
not to take that action in the interest of preserving the cease-fire with the MILF. If
Manila’s truce with the MILF collapses, the Philippine Army — elements of which
favor restarting military actions against the MILF — undoubtedly would use recently
supplied U.S. military equipment against these groups. The Philippine government
might change policy and encourage U.S. action against the MILF at least in a role
similar to that in the Balikatan exercise against Abu Sayyaf. In order to avoid this,
the Bush Administration has supported President Arroyo’s attempts to restore the
cease-fire that was on the verge of collapse in March-April 2003. However,
Philippine cease-fires with the MILF have not yet addressed the major U.S. interest
of ending MILF support and assistance to JI. A key issue for the immediate future
is whether the international observer group slated to monitor the current cease-fire
will be installed and whether it, coupled with Malaysia role, will dampen MILF
cooperation with JI. Reports in early 2005 indicated that MILF-JI training may have
declined.
President Arroyo’s narrow election victory in May 2004 seemed to augur well
for Philippine-U.S. counterterror cooperation. However, relations have been strained
by her decision to hasten the withdrawal of the small Filipino military contingent in
Iraq to secure the release of a Filipino held hostage by Iraqi insurgents. U.S. officials
criticized her decision. The Pentagon has indicated that the United States will

---

CRS-44
continue to supply weapons to the AFP, but U.S. officials have indicated that other
components of the security relationship could be affected by Arroyo’s decision.151
Thailand
Counterterrorism cooperation with Thailand faces fewer political constraints
than do efforts with most other Southeast Asian states. Security cooperation with
Thailand is well established: ties were institutionalized in 1962 with the U.S.-Thai
military pact, after which Thailand provided bases to support U.S. operations in
Vietnam. The relationship continued through the Cold War, and today includes
annual joint military exercises and extensive intelligence coordination. However, the
Thai authorities remain sensitive to perceptions that they are too closely aligned with
the United States. According to press reports, Thai officials requested that the Bush
Administration refrain from publicizing Thailand’s support of the invasion of Iraq.152
After remaining neutral during the combat phase, Thailand sent a contingent of over
450 troops to Karbala to join the multinational force under Polish command. The
scheduled pull-out was completed in September 2004. Other Thai officials have
voiced concern that Thailand’s involvement in Iraq could fuel Islamic militancy on
its own soil.153
Although the recent violence in the southern provinces may prove otherwise,
Thailand has been considered attractive to terrorists not as a base of operations, but
as a meeting place or transit point because of its unrestrictive, tourist-friendly border
controls. Maintaining a low profile on bilateral security cooperation, particularly in
the intelligence realm, may prove helpful in luring terror network operatives to the
country, where Thai and American intelligence could monitor their activities.
Downplaying U.S. support might be prudent in the Muslim region, where local
groups have demonstrated a strong distrust of American — as well as central Thai
government — motives.
Role of Congress/Legislation
Appendix A contains tables detailing U.S. assistance to Indonesia, the
Philippines, and Thailand since the September 11, 2001 attacks.
Indonesia
Administration officials and Members of Congress particularly have struggled
to find a way to reconcile the need to gain the cooperation of the Indonesian military
(TNI) with the desire to keep pressure on the military to accept civilian control and
151 Illustre, Jennie L. “U.S. signals no pause in military aid.” Philippine News (San
Francisco), August 4, 2004.
152 Raymond Bonner, “Thailand Tiptoes in Step with American Antiterror Effort,” New York
Times. June 7, 2003.
153 “Thai PM Says Troops Will Pull Out of Iraq if Unable to Work,” Agence France Presse.
April 20, 2004.

---

CRS-45
accept accountability for past human rights violations. These include the brutal
repression against peaceful pro-independence supporters in East Timor, which
became the independent nation of Timor Leste on May 20, 2002, under United
Nations supervision, especially the November 1991 “Dili Massacre.” Congress also
has been concerned about the lack of progress, until mid-2004, towards identifying
and bringing to justice the perpetrators of the attacks on American teachers and
students from an international school near Timika, in West Papua Province, that is
connected to U.S.-based Freeport-McMoRan Copper and Gold Inc.
The “Leahy” Amendment Restriction on Military Aid. For more than
a decade, Congress has restricted the provision of military assistance to Indonesia due
to concern about serious human rights violations by the Indonesian military (TNI),
most notably the massacre of up to several thousand in 1991 and 1999. Congress
first took the initiative by enacting legislation prohibiting International Military
Education and Training (IMET) and arms sales to Indonesia in October 1992, under
the so-called “Leahy Amendment” to the FY1992 foreign operations appropriation
bill. In subsequent years, Congress regularly included similar or related human rights
conditions to successive annual foreign operations appropriations bills. The specific
conditions have varied over time, but none of them have been fulfilled to date.
Partly in response to congressional pressure, President Clinton in September
1999 suspended all military, economic, and financial aid to Indonesia. The aid cutoff
was imposed in response to a wave of mass killings and destruction of property
perpetrated by the Indonesian army and locally-recruited paramilitary in revenge for
an overwhelming vote for independence by East Timorese in an August 30, 1999
U.N.-supervised plebiscite.154 However, in 2000, the Clinton Administration lifted
part of the ban to allow the sale of U.S. spare parts for Indonesian C-130 military
transport aircraft. In January 2005, as part of U.S. assistance to Indonesia in the
aftermath of the tsunami disaster, Secretary of State Colin Powell announced the sale
of C-130 spare parts would go forward.
Appendix B contains a legislative history of the Leahy Amendment and its
variations since FY2002.
The Impact of 9/11. Following the September 11, 2001 terrorist attacks,
Congress and the Bush Administration engaged in extensive informal negotiations
about ways to support increased anti-terrorist cooperation with Indonesia while
continuing to press the Indonesian government about other U.S. concerns. A main
policy consideration has been the argument that the TNI generally has more effective
domestic intelligence capabilities than the national police, which until January 2001
were part of the military establishment. For FY2002-FY2003, the Congress provided
funds to allow the Department of Defense to provide counterintelligence training to
the Indonesian police and also allowed the provision of funds for Expanded
International Military Education and Training (E-IMET), which is designed to
provide training in human rights and respect for democracy. Because of a deadly
attacks on U.S. civilians in Papua suspected to be the work of the TNI, Congress
154 Jim Lobe, “U.S. Suspends Military Ties with Indonesia.” Asia Times, Sept. 11, 1999
(atimes.com)

---

CRS-46
suspended funds for full Indonesian participation in IMET. U.S. assistance to the
Indonesian national police has continued. The U.S. military’s participation in tsunami
disaster relief in Aceh in January-February 2005 resulted in cooperative relief
measures with the TNI, including sales of the C-130 spare parts. In the view of some
analysts, the Bush Administration saw this as an opportunity to restore full military
to military ties with the TNI. By mid February 2005, the Administration was
reportedly planning to carry out the certification requirements of the Leahy
Amendment to make Indonesia eligible for participation in the IMET program.
Thus far, Congress has not been satisfied with Indonesia’s efforts to increase the
accountability of the TNI. In regard to the repression in East Timor, some 12 of 18
military officers and civilians brought before a special tribunal in Indonesia were
acquitted, while six, including civilians, were convicted and given prison terms up
to five years.155 Since those trials, the Indonesian Supreme Court has upheld the
acquittals or rejected appeals by the prosecution in three cases.156 As a consequence,
foreign assistance to Indonesia since the September 11, 2001 attacks has been limited
to economic assistance and anti-terrorism assistance and training for the Indonesian
National Police. Assistance to the Indonesian military remains suspended both for
policy reasons and because of a legislative ban on Foreign Military Financing (FMF)
of arms exports (see below).
It remains to be seen how Congress will react to the U.S. government’s
determination that a member of a Papuan separatist group was responsible for the
murder of U.S. citizens in Timika in 2002. Critics both in Indonesia and abroad have
alleged that the FBI overlooked information concerning the businessman’s long ties
to the TNI, and that the U.S. move was aimed at clearing the way for the restoration
of military-to-military assistance and the resumption of military assistance.157
FY2005 Request for Indonesia, the Philippines, and Thailand
H.R. 4818, making appropriations for foreign operations, including Indonesia,
the Philippines, and Thailand for FY2005, passed the House on July 15, 2004. As
in recent years, the bill provides that none of the funds appropriated under the
heading Foreign Military Financing Program shall be available for financing arms
sales to Indonesia, along with Sudan and Guatemala. Sec. 575 would continue the
prohibition on International Military Education and Training Assistance (IMET).
S. 2144, which would authorize appropriations for foreign assistance, the Peace
Corps, and other purposes for FY2005, includes the following restrictions on aid to
Indonesia:
155 “Indonesia Seeks to Clear General of Timor Crimes.” New York Times, June 9, 2003.
156 “Indonesian Supreme Court Upholds Acquittals in East Timor Rights Cases.” Agence
France Presse, May 24, 2004.
157 “Rights Groups Accuse Ashcroft of Cover-Up.” Australian Financial Review, Aug. 5,
2004.

---

CRS-47
Sec. 2517. Conditions on the Provision of Certain Funds to Indonesia. This
section conditions the release of any funds available for Indonesia in FY2005
under the FMF or IMET program (with the exception of funds under the
expanded IMET program) on the receipt of a certification submitted by the
President that the Government of Indonesia and the Indonesian Armed Forces are
taking effective measures to conduct an investigation of the attack on United
States citizens in Indonesia on August 31, 2002, and to criminally prosecute the
individuals responsible for the attack.

---

CRS-48
Other CRS Products Dealing with Terrorism in Asia
CRS Report RL32259. Terrorism in South Asia.
CRS Report RL32394. Indonesia: Domestic Politics, Strategic Dynamics, and
American Interests.
CRS Report RS20572. Indonesian Separatist Movement in Aceh.
CRS Report RS20697. Philippine-U.S. Security Relations.
CRS Report RL31265. Abu Sayyaf: Target of Philippine-U.S. Anti-Terrorism
Cooperation.
CRS Report RL32129. Malaysia: Political Transitions and Implications for U.S.
Policy.
CRS Report RS20490. Singapore: Background and U.S. Relations.
CRS Report RS21358. Australia: Background and U.S. Relations.
CRS Report RS21903. Islam in South and Southeast Asia.
CRS Report RL32223. Foreign Terrorist Organizations.
CRS Report RL31119. Terrorism: Near Eastern Groups and State Sponsors, 2002.
CRS Report RS21529. Al Qaeda after the Iraq Conflict.
CRS Report RL32120. The “FTO List” and Congress: Sanctioning Designated
Foreign Terrorist Organizations.
CRS Report RL32058. Terrorists and Suicide Attacks.
CRS Report RL31831. Terrorist Motivations for Chemical and Biological Weapons
Use: Placing the Threat in Context.
CRS Report RL31152. Foreign Support of the U.S. War on Terrorism.
CRS Report RL31811. Appropriations for FY2004: Foreign Operations, Export
Financing, and Related Programs

---

CRS-49
Appendix A: U.S. Assistance to Indonesia, the
Philippines, and Thailand Since September 2001
Table 1. U.S. Assistance to Indonesia, FY2002-FY2005
($ in Millions)
Total
FY
FY
FY
FY05
FY06
Program
(FY02-
2002
2003
2004
(Est.)
(Req.)
04)
Economic Assistance
Child Survival/Health
35.57
31.96
34.00
101.52
36.70
27.54
(CSH)
Development Assistance
38.70
39.02
31.29
109.01
27.84
48.42
(DA)
Economic Support Funds
50.00
59.61
49.71
159.32
64.48
70.00
(ESF)
Peace Corps
-
-
-
0.00
-
-
PL. 480, Title II Food Aid
5.67
29.54
6.60
41.81
11.90
18.19
Total Economic Assistance
129.94 160.12 121.60
411.66 140.92 164.15
Security Assistance**
International Narcotics &
4.00
-
-
4.00
-
5.00
Law Enforcement (INCLE)
International Mil. Education
0.46
1.14
0.60
0.80
& Training (IMET)
0.405*
0.28
Foreign Mil. Sales
-
- -
0.00
0.92
1.00
Financing (FMF)
Nonproliferation, Anti-
Terrorism, Demining &
8.00
1.01
5.76
14.76
5.30
5.75
Related (NADR)
Total Security
12.41
1.28
6.21
19.90
6.82
12.55
Assistance**
Total Economic and
142.35 161.41 127.81
431.57 147.74 176.70
Security Assistance**
Source: Department of State/Congressional Budget Justifications, Foreign Operations, FY2004/2005,
(“All Spigots” Tables) and Secretary of State.
*Civilians only for FY2002
** The military assistance figures do not include counterterrorism funds from the FY2002 anti-
terrorism supplemental appropriations (P.L.107-206), which provided up to $4 million for law
enforcement training for Indonesian police forces and up to $12 million — of which the Bush
Administration allocated $8 million — for training and equipping Indonesian police to respond
to international terrorism.

---

CRS-50
Table 2. U.S. Assistance to the Philippines, FY2002-FY2005
($ in Millions)
FY
FY
FY
Total
FY 05
FY 06
Program
2002
2003
2004
(FY02-04)
(Est.)
(Req.)
Economic Assistance
Child Survival/Health (CSH)
25.60
22.92
29.35
77.87
26.80
21.40
Development Assistance (DA)
24.46
28.21
22.07
74.73
27.58
21.52
Economic Support Funds
21.00
45.00
17.65
83.65
34.72
20.00
(ESF)
Peace Corps
2.17
2.09
2.60
6.86
2.88
-
PL. 480, Title II Food Aid
-
-
-
0.00
-
-
Total Economic Assistance
73.22
98.22
71.66
243.10
91.98
62.92
Security Assistance
International Narcotics & Law
-
-
2.00
2.00
3.97
-
Enforcement (INCLE)
International Mil. Education &
2.03
2.40
2.70
7.13
3.00
2.90
Training (IMET)
Foreign Mil. Sales Financing
19.00
49.87
19.88
88.75
29.76
20.00
(FMF)
Foreign Mil. Sales Financing
25.00
-
-
25.00
-
-
(FMF) - Supplemental
Nonproliferation, Anti-
Terrorism, Demining &
0.10
2.09
-
2.19
0.60
5.15
Related (NADR)
Total Security Assistance
46.03
52.27
24.58
122.88
36.73
38.05
Total Economic and Security
119.25 150.49 96.24
365.98 128.71 100.97
Assistance
Source: Department of State/Congressional Budget Justifications, Foreign Operations, FY2004/2005
(“All Spigots” Tables)

---

CRS-51
Table 3. U.S. Assistance to Thailand, FY2002-FY2005
($ in Millions)
Total
FY
FY
FY
FY05
FY06
Program
(FY02-
2002
2003
2004
(Est.)
(Req.)
04)
Economic Assistance
Child Survival/Health (CSH)
1.00
1.50
-
2.50
-
-
Development Assistance (DA)
0.75
1.25 -
2.00
-
-
Economic Support Funds
-
-
-
0.00
0.92
-
(ESF)
Peace Corps
1.27
1.82
2.07
5.16
2.55
-
PL. 480, Title II Food Aid
-
-
-
0.00
-
-
Total Economic Assistance
3.02
4.57
2.07
9.66
3.47
0.00
Security Assistance
International Narcotics & Law
4.00
3.70
2.00
9.70
1.61
1.00
Enforcement (INCLE)
International Mil. Education &
1.75
1.77
2.45
5.97
2.50
2.40
Training (IMET)
Foreign Mil. Sales Financing
1.30
1.99
1.00
4.29
1.49
1.50
(FMF)
Foreign Mil. Sales Financing
-
-
-
0.00
-
-
(FMF) - Supplemental
Nonproliferation, Anti-
Terrorism, Demining &
0.72
0.20
0.38
1.30
0.75
1.00
Related (NADR)
Total Security Assistance
7.77
7.66
5.83
21.25
6.35
5.90
Total Economic and Security
10.79
12.23
7.90
30.91
9.82
5.90
Assistance
Source: Department of State/Congressional Budget Justifications, Foreign Operations, FY2004/2005
(“All Spigots” Tables)

---

CRS-52
Appendix B: Restrictions on Aid to Indonesia Since
the “Leahy Amendment” to the FY1992 Foreign
Operations Appropriations Act
For more than a decade, Congress has restricted the provision of military
assistance to Indonesia due to concern about serious human rights violations by the
Indonesian military (TNI), most notably the massacre of hundreds of people
participating in a pro-independence rally in Dili, East Timor, in November 1991.
Congress first took the initiative by enacting legislation prohibiting International
Military Education and Training (IMET) and arms sales to Indonesia in October
1992, under the so-called “Leahy Amendment” to the FY1992 foreign operations
appropriation bill. Section 599H of H.R. 5368, sponsored by Senator Patrick Leahy,
of Vermont, provided that none of the funds appropriated for International Military
Education and Training (IMET) could be made available to Indonesia unless by
December 15, 1992, the Secretary of State provided the Committees on
Appropriations with a certification verifying the fulfillment by the Indonesian
government of three conditions:
(1) special emphasis is being placed on education of Indonesian military
personnel that will foster greater awareness of and respect for human rights
and that will improve military justice systems;
(2) special emphasis is also being placed on education of civilian and
military personnel that will foster greater understanding of the principle of
civilian control of the military; and
(3) the Secretary of State will use all available and appropriate means to
ensure there is progress on the East Timor situation, such as the full
availability of legal remedies under Indonesian law to all civilians
convicted in connection with the November 1991 East Timor incident,
increased access for human rights groups to East Timor, and constructive
cooperation with the United Nations Secretary General’s efforts to promote
dialogue between Indonesia and Portugal to resolve issues concerning East
Timor.” (Sec. 599H, P.L. 102-391)
In subsequent years, Congress regularly included similar or related human rights
conditions to successive annual foreign operations appropriations bills. The Clinton
Administration either acquiesced or did not object strongly to congressional
prohibitions and conditionality on military assistance to Indonesia, despite its general
opposition to legislative restraints on the President’s authority to conduct foreign
policy. Partly in response to congressional pressure, President Clinton in September
1999 suspended all military, economic, and financial aid to Indonesia. The aid cutoff
was imposed in response to a wave of mass killings and destruction of property
perpetrated by the Indonesian army and locally-recruited paramilitary in revenge for

---

CRS-53
an overwhelming vote for independence by East Timorese in an August 30, 1999,
U.N.-supervised plebiscite.158
In action on the FY2001 Foreign Operations Appropriations (P.L. 106-
429/H.R. 5526), following the 9/11 attacks, Congress made Indonesia eligible for
International Military Education and Training (IMET) for the first time in several
years, but only in the “expanded” version, known as E-IMET which emphasizes
respect for human rights and civilian control of the military. However, Sec. 579 of
the same legislation banned both IMET and Foreign Military Sales Financing (FMF)
for Indonesia unless the President determined and reported to Congress that the
Indonesian government and armed forces were fulfilling six requirements relating to
East Timor. These included facilitating the return of East Timorese refugees from
West Timor and bringing to justice “members of the military and militia groups
responsible for human rights violations in Indonesia and East Timor.”
FY2002 Foreign Operations Appropriations — Seven Criteria for
IMET and FMF. Section 572 (a) of P.L. 107-115 (H.R. 2506) allowed Indonesia’s
participation in the Expanded IMET program without conditions, but made FMF
available only if the President determined and reported to Congress that the
Indonesian government and Armed Forces were effectively addressing seven human
rights issues. These were similar to the those in the FY2001 legislation, but they also
required certification that Indonesia was allowing “United Nations and other
international humanitarian organizations and representatives of recognized human
rights organizations access to West Timor, Aceh, West Papua, and Maluka,” and
“releasing political detainees.”
FY2002 Supplemental Appropriation for Combating Terrorism (P.L.
107-206/H.R. 4775). In an effort to promote anti-terrorism cooperation without
abandoning U.S. human rights concerns, Congress focused U.S. assistance on the
Indonesian national police, a body that had been separated from the Indonesian
military in 1999 as part of an effort by the post-Suharto reformist government to
reduce the role of the TNI. The FY2002 anti-terrorism supplemental appropriations
provided up to $4 million for law enforcement training for Indonesian police forces
and up to $12 million — of which the Bush Administration allocated $8 million —
for training and equipping Indonesian police to respond to international terrorism,
including the establishment of a special police counterterrorism unit.
FY2003 Foreign Operations Appropriations (P.L. 108-7/H.J.Res. 2).
The 107th Congress failed to complete action on the FY2003 foreign operations
appropriations bill (S. 2779), which carried over to the 108th Congress. Signed into
law on February 20, 2003, the FY2003 measure included a shorter revised list of
conditions on foreign military sales financing funding than was included in the
FY2002 appropriation. Military education and training assistance continued to be
restricted to E-IMET. The bill also earmarked $150 million in economic support
funds for Indonesia, of which not less than $10 million is to be used for programs and
activities in the troubled state of Aceh and not less than $5 million for reconstruction
158 Jim Lobe, “U.S. Suspends Military Ties with Indonesia.” Asia Times, Sept. 11, 1999
(atimes.com).

---

CRS-54
in Bali. In addition, the FY2002 appropriation also provided not less than $25
million for the Democratic Republic of Timor-Leste (East Timor).
Sec. 568 of the FY2003 appropriations bill included a substantially shorter list
of certification requirements than previous years. It banned foreign military sales
financing funding for lethal items to the Indonesian military unless the President
certified to Congress that
(1) the defense ministry is suspending members of the military who “have
been credibly alleged to have committed gross violations of human rights,
or to have aided or abetted militia groups”;
(2) the Government of Indonesia is prosecuting such offenders and the
military is cooperating with such prosecutions; and
(3) the Minister of Defense is making publicly available audits of receipts
and expenditures of the Indonesian Armed Forces, including audits of
receipts from private enterprises and foundations.
FY2004 Foreign Operations Appropriations (P.L. 108-199). For
FY2004 the Administration requested $132.1 million for all Indonesia programs
administered by the U.S. Agency for International Development, including P.L. 480,
Title II food aid, a decrease of $11.4 million from the $141.5 million allocated for
FY2003.
In December 2003, the Foreign Operations bill, H.R. 2800, was wrapped into
the omnibus Consolidated Appropriations Act, 2004 H.R. 2673 which became law
in January 2004 (P.L. 108-199). The act contains language on Indonesia that places
certain limitations on assistance to Indonesia. Specifically, section 597 allows FMF
funds to be expended, and licences for the export of lethal defense articles to be
issued, only if the President certifies to Congress that the TNI is actively suspending,
prosecuting, and punishing those responsible for human rights abuses and that the
TNI is cooperating with the United Nations East Timor Serious Crimes Unit and that
the Minister of Defense is making publically available audits of TNI’s accounts.
IMET is to be available for Indonesia if the Secretary of State reports to Congress
that Indonesia is cooperating with the Federal Bureau of Investigation’s investigation
of the attack on Americans at Timika. The act adds that such restrictions do not
apply to expanded IMET.
FY2005 Foreign Operations Appropriations (P.L. 108-447). Section
572 conditions Foreign Military Financing (FMF) of “lethal defense articles” to the
TNI to certification by the Secretary of State that the TNI is taking steps to counter
international terrorism, that the Indonesian government is prosecuting and punishing
TNI members guilty of human rights abuses or aiding militia groups, that the TNI is
cooperating with efforts to resolve cases of human rights abuses “in East Timor and
elsewhere,” and that the TNI is increasing transparency and accountability of their
financial assets and expenditures. An exception is made to these conditions by
Section 590, which allows FMF for the Indonesian navy for enhancing maritime
security. Section 572 also conditions Indonesian eligibility for participation in IMET

---

CRS-55
to certification by the Secretary of State that the Indonesian government and the TNI
are cooperating with the U.S. FBI’s investigation of the Timika attack and killings.

---

CRS-56
Appendix C: Maps
Figure 2. Southeast Asia

---

CRS-57
Figure 3. Indonesia

---

CRS-58
Figure 4. Malaysia and Singapore

---

CRS-59
Figure 5. The Philippines

---

CRS-60
Figure 6. Thailand

---